Introduction
This article considers section 238 of the Insolvency Act 1986 ('IA 1986') within the context of what the courts consider to be a ‘transaction’ when applying for a declaration to do with antecedent transactions. Whilst this article is limited to the consideration of section 238, similar factors apply to applications made further to sections 339 and 423 IA 1986.
The recent further dip in oil price has placed even more pressure on the costs paid by Operators to Contractors, and also how much reliance Contractors can place on an Operator's promise to pay.
More important changes to the Insolvency Act 1986 (IA86) and other insolvency- related legislation come into force this week (1 October 2015) as a result of the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015).
We have updated our Implementation Timetable to reflect the changes.
There will only be minor changes in the levy rules for 2016/17. They will be practical or technical adjustments.
The PPF remains less than content with the covenant strength behind numbers of contingent asset guarantees. The guidance for 2016/17 will have more on the due diligence it expects.
The consultation document also covers:
The recent decision in Brooks and Willetts (Joint Liquidators of Robin Hood Centre plc) v Armstrong and Walker [2015] EWHC 2289 sets out guidance on the burden of proof for directors in wrongful trading claims when seeking to establish that they have taken every step to minimise the potential loss to creditors. We explore the issues raised for practitioners.
The background to the case
The question of appropriate action in the face of directors’ duties to creditors in the pre-insolvency “twilight zone” is a perennial one. In particular, the question of preservation of asset value (given all the hoo- ha about pre-packs), and whether to transfer out assets before insolvency has an impact on value, is fraught with difficulty. Two recent cases offer contrasting versions of how to go about it.
Background – Re French UK plc
We all know that statutory demand can be issued for undisputed debts in excess of £750, and if not satisfied for 21 days, the stat demand is prima facie evidence of insolvency. What happens where there are multiple dents of less than £750 each however? Howell v Lerwick Commercial Mortgage Corporation Ltd [2015] EWHC 1177 (Ch) provides an insight.
The background
Introduction:
Wide ranging changes to insolvency law will come into force on 1 October 2015 that will have repercussions for insolvency practitioners, directors and D&O insurers alike. One of the more significant - and controversial - changes allows office holders in insolvency proceedings to assign claims deriving from those proceedings to third parties. The implications of this are potentially far reaching and are discussed below.
New powers of assignment
Credit Today reports that recent statistics from the Accountant in Bankruptcy (AiB), the government agency that administers the insolvency regime in Scotland, have revealed that:
It cannot have escaped the attention of anyone involved in the aviation finance industry that the UK is currently in the process of ratifying the Cape Town Convention (being the Convention on International Interests in Mobile Equipment and related Protocol on Matters Specific to Aircraft Equipment). Here, we will look at that ratification process and consider the principal legal and practical implications for our clients.
Ratification Process