In a judgment only recently published via the Building Law Reports, the High Court has ruled that a winding up procedure applicable to companies should not be used where there is a triable issue as to the validity of an adjudicator’s decision relied on as evidence of a company being unable to pay its debts: Towsey v. Highgrove [2012] EWHC 2644 (Chancery Division).
Background
VLM Holdings Limited –v- Ravensworth Digital Services Limited [2013] EWHC 228 (Ch)
Précis – In February 2013, the High Court ruled that businesses are permitted to use software under a sub-licence if the head licensee’s business is terminated or becomes insolvent. This ruling, however, is dependent upon the “scope of authority” given to the sub-licensor by the head licensor.
What?
In Hamilton v Hamilton [2013] EWCA CIV13 the Court of Appeal was asked to decide on whether it was appropriate to vary the terms of a Consent Order which provided for payment of a lump sum by a former wife to her former husband.
The Order required the wife to pay her husband £450,000 in 5 payments.
The wife paid a total of £240,000 by which time her business had been placed in administration and she was unable to make any further payments.
This morning we got the news that HMV had gone into administration and last week it was Jessop that went under. HMV’s administrators are still trading from the stores but the administrators of Jessops have ceased trading. Can their landlords expect their rent?
The UK Supreme Court judgment in the conjoined cases of Rubin and another v Eurofinance SA and others and New Cap Reinsurance Corporation (in Liquidation) and another v AE Grant and others [2012] UKSC 46, which provides vital clarification on the effect of foreign insolvency judgments on the UK courts.
Background & Court of Appeal
OSCR report issued following investigation of benefits to employee on wind-up
As highlighted by the 2008-2009 crisis, the insolvency of sub-suppliers raises important challenges. Automotive parts suppliers may need to find an alternative sub-supplier at short notice or may have to take over the production of certain parts themselves, which often requires a recovery of the tools that were provided to the sub-supplier. Both scenarios raise difficult legal issues.
The demise of the ARP after 30 September 2013 and the prospect of new entrants to the solicitors’ professional indemnity market creates the possibility of more incidences of insurer insolvency. We look at the consequences for firms insured by those insurers.
No financial stability requirement for qualifying insurers
Over recent years in this economic climate, it has been increasingly common for distressed companies to be sold in an effort to rescue the entity. On first blush, this seems a relatively simple exercise although care is required to ensure that no unexpected tax charges arise, especially if there is restructuring of the debt. The taxation rules governing the end of business life are varied and complex and the sooner that thought is given to taxation in respect of the insolvent company the better this will be for the seller, the remaining group and for any buyer.
The government has clarified which claims will benefit from the continued recoverability of CFA success fees and ATE insurance premiums, following its announcement in May last year that there would be a two-year delay to implementation of this aspect of the Jackson reforms for “insolvency proceedings” (see post).