It was anticipated that more radical thoughts would emerge from Lord Justice Jackson’s latest speech last night to the Insolvency Practitioners’ Association on the subject of rolling out more fixed costs, and so it proved.

In Sharma v Top Brands Ltd [2015] EWCA Civ 1140, the Court of Appeal refused to allow a former liquidator of a company (which was a vehicle for VAT fraud) to rely on the illegality defence to avoid liability for a claim brought against her for breach of duty under section 212 of the Insolvency Act 1986 (IA 1986).

Background

This article takes a look at the considerations laid down in Re Sahaviriya Steel Industries UKLimited [2015] EWHC 2726 when the court is asked to make a validation against anticipated payments – what guidance can be extracted?

As reported in Reed Smith’s March 2015 client alert, insolvency practitioners currently enjoy an exemption from the provisions of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).

Key point

Whilst a winding up petition is not the appropriate forum to conduct a “mini trial”, the court is not bound to dismiss the petition if the dispute raised by the debtor company lacks substance.

The facts

Key point

The Court has discretion to suspend time for the purposes of limitation periods when exercising its jurisdiction to restore a company to the register.

The facts

The former director of a dissolved company applied for an order restoring the company and, so that it could then bring claims against third parties that had expired, suspending the running of time during the period when it was dissolved.

The decision

A major consideration for any Claimant in an action seeking monetary damages is whether the Defendant to an action has the assets to meet a judgment, whether that be a claim against an individual or a limited company backed by the personal guarantee of an individual. That consideration should extend to a scenario where the Defendant has a judgment made against them and then either refuses to pay or cannot pay on time. The Claimant may have to seek their bankruptcy to achieve some payment.

http://www.bailii.org/ew/cases/EWHC/Ch/2015/3721.html

Two insurance intermediaries entered into administration. Although heavily insolvent, they had significant funds held in client accounts. Those funds represented insurance premiums collected from customers but not yet paid on to the insurers. The issue therefore arose as to whether the insurers, the customers or the unsecured creditors of the intermediaries were entitled to those funds.

Summary

From 1 January 2016, deposits made by private individuals and small businesses to any authorised firms are protected by the Financial Services Compensation Scheme to a limit of £75,000 (previously £85,000).