The Court of Appeal’s ruling in Neumans LLP v Andrew Andronikou & Ors [2013] EWCA Civ 916 has provided some useful guidance to insolvency practitioners on the courts’ approach to administration and liquidation expenses.
Pre-match warm up
On 17 September, TPR updated its trustee toolkit to include a new learning module: ‘Winding up a DB scheme, insolvent employer: wind-up or transfer to PPF’. The module, now available to download, covers DB scheme closures where the employer is insolvent.
An updated Statement of Insolvency Practice (SIP) relating to pre-packaged sales in administrations has been issued by the Joint Insolvency Committee, effective from 1 November 2013. The new SIP aims to provide greater clarity for creditors, with insolvency practitioners (IPs) having to provide earlier notification of the pre-packaged sale and more detail as to the circumstances surrounding, and terms of, the sale transaction.
On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case on where a contribution notice (CN) or financial support direction (FSD) issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings (eg administration) ranks in the order of priority of payment.
Lending to a foreign company? If you choose English law to govern your facility documents and provide for the English court to have exclusive jurisdiction, an English scheme may be a viable means of restructuring the debt later, if the need arises.
On 24 July 2013, in BESTrustees v Kaupthing, Singer & Friedlander [2013] EWHC 2407 (Ch) the High Court ruled in favour of an underfunded scheme, whose insolvent sponsor hoped to offset £2m in payments against its outstanding debt.
Another day, another CMBS transaction declares an insolvency related event of default (after the REC6 default), this time based on the ‘balance sheet’ event of default.
The High Court has confirmed that all rights relating to the control of data belonging to, or being controlled by, a company at the time it entered into liquidation remain vested in the company at and following its liquidation. Liquidators are therefore not personally liable for compliance with the Data Protection Act 1998 in respect of this data as they will be viewed as agents acting for the company rather than as 'data controllers'.
In his judgment handed down on 18 October1 Popplewell J took the opportunity to clarify the law
regarding payments by a company to third parties which may or may not have been suspicious and
where the company may or may not have been insolvent at the time. He looked long and hard at the
state of knowledge necessary to ground liability, at defences available to directors and whether the
court could relieve liability for innocent breaches.
For landlords of commercial premises, one of their main concerns is making sure that the tenant pays all sums due under the lease. Unfortunately this doesn’t always happen so what are the options for recovering unpaid rent? This note summarises the different methods of enforcing payment of rent and looks at the advantages and disadvantages of each.
Considerations before you take action
Before commencing any enforcement action to recover rent arrears you should think about the following points: