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.

Reports have estimated that 1,300 UK law firms have been put at risk after Latvian insurer Balva was put into liquidation. Initially Latvian Board of Financial and Capital Market Commission (FCMC) insisted there was no cause for concern as all Balva’s insurance policies would remain effective and be transferred to its replacement underwriter, Berliner. However, when Berliner pulled the pin, declining to cover the Balva policies, panic hit the UK legal market. Berliner's exit was described by one broker as the “biggest hand grenade into [the] bottom end of the market for many years.”

The world is getting smaller. The number of people who hop from country to country throughout their lives is increasing. Inevitably, when a jet-setting life becomes financially troubled, bankruptcy and other court proceedings are likely to be similarly international. Two cases involving the same parties were heard in both the High Court in London and the US Bankruptcy Court for the Southern District of New York. See Kemsley v Barclays Bank Plc & Ors [2013] EWHC 1274 (Ch) (15 May 2013), 2013 WL 1904308, and In re Kemsley, 489 B.R. 346 (Bankr. S.D.N.Y. 2013).

Bilta (UK) Limited (Bilta) and its liquidators brought a claim against the defendants for damages and equitable compensation on the basis of conspiracy to defraud and injure Bilta and for dishonest assistance by (among others) the 6th and 7th defendants in breach of fiduciary duties by Bilta's directors. The defendants argued that the unlawful conduct of Bilta's directors and sole shareholder could be attributed to the company itself, meaning that the action brought by Bilta and its liquidators would fail.

In a recent costs decision, the English High Court partly disallowed an indemnity sought by receivers in respect of costs payable to certain third parties and the receivers' own costs and expenses for certain steps.

In our December 2010 and April 2011 insolvency updates, we reported on the UK High Court and Court of Appeal decisions in BNY Corporate Trustee Services Limited v Eurosail. The issue before both Courts was whether Eurosail was insolvent by virtue of being unable to pay its debts under the balance sheet limb of the solvency test in section 123 of the UK Insolvency Act 1986. The Court of Appeal upheld the High Court decision that Eurosail was solvent, noting that it had not reached the "point of no return".

The English case Webster & Anor v Mackay is an appeal against a refusal to annul or rescind bankruptcy orders. The appeal was based on the assertion that the petition debt was not for a liquidated sum as required under section 267(2) of the Insolvency Act 1986. The debtors were obliged, as evidenced by a promissory note, to repay a loan of £200,000 to Mr Mackay. However, Mr Mackay also alleged a repudiatory breach of the loan agreement due to the failure of the debtors to provide accounts.