On 7 January 2013, the Regulator published a report detailing its decision to give clearance to entities in the UK Coal Group to pursue a restructuring plan agreed on by UK Coal's shareholders in November 2012.

A High Court judgment by Mr. Justice Richards handed down on January 29 has confirmed that a client’s open positions on trades, made with a firm regulated by the UK Financial Services Authority (FSA) that subsequently enters into an administration or liquidation, should be valued by reference to the market value of the trades at the time of the firm’s failure rather than at the date the positions are closed out.

Re MK Airlines (16 May 2012) (unreported)

Further to our October 2011 update, the UK Supreme Court has released its decision in respect of the New Cap Reinsurance and Rubin appeals.

In Ollerenshaw and Reeh v the Financial Services Authority (the FSA), former directors of the Black and White Group Limited (in liquidation) (B&W), challenged decisions of the FSA in a reference to the Upper Tribunal.

In a recent landmark ruling, the UK Supreme Court deliberated on the question of whether an overseas defendant had to have submitted to the jurisdiction under common law before a foreign bankruptcy order would be recognised and enforced in England. Richard Keady and Jay Qin of Bird & Bird consider the practical implications of the decision and the significance it may have on practitioners going forward.

It is fairly common for solicitors to act for both the petitioning creditor in an insolvency as well as for the insolvency practitioner appointed as liquidator. Of course, there is always the potential for a conflict of interest to arise and it can be tricky for solicitors, once involved, to be objective and determine when it is appropriate to withdraw from acting.

The Court of Appeal has given guidance on when the duty of directors to have regard to the interest of creditors arises. This is an important point, as the general statutory duty of a director to promote the success of the company for the benefit of the company's members is expressly subject to the rules on creditors' interests. The court's decision also considers whether a dividend payment can be challenged as a transaction at an undervalue under section 423 of the Insolvency Act 1986.

Facts

In normal circumstances, a director’s primary duty (owed to the company, not the company’s shareholders or the corporate group) is to promote the success of the company for the benefit of its shareholders as a whole. When a company enters a period of financial distress (the so-called “zone of insolvency”) there is a shift of emphasis in the duties of the directors: directors must consider the interests of the company’s creditors and, depending on the extent of the financial distress, may need to prioritise such interests over those of its members.

The financially challenged NHS trust which in July became the first to be put into the Regime for Unsustainable NHS Providers should be dissolved, according to its special administrator.