Since the introduction of The Companies Act 2014, directors have relied on the Summary Approval Procedure as a means of sanctioning certain activities that are otherwise prohibited.

While it has been a welcome development in simplifying financial transactions, directors need to be mindful of the appropriate steps to be taken so they are not leaving themselves open to committing an offence or being personally liable for the debts of a company.

Background

If a company goes into liquidation, the liquidator is able to disclaim the whole of an insolvent tenant’s liability under a lease. The disclaimer ends all of the tenant’s rights, interests and liabilities, effectively meaning that the tenant can get out of the lease early. This can have a significant impact on a landlord, whose expected income from the property suddenly comes to an end.

Greatest focus will be on retail and outsourcing sectors.

Key points

The face of the UK's high streets and shopping centres continues to change rapidly as consumers, shopping and leisure habits change and evolve.

In this latest article in our "future of consumer" series, we look at the continued use of company voluntary arrangements (CVAs) by retailers (and restaurant owners) to reduce their exposure to landlords under their leases and ask what are the trends and the future direction of this restructuring procedure.

The High Court has recently considered a number of questions of contractual construction in the context of guarantees: Barclays Bank plc v Price & Ors [2018] EWHC 2719 (Comm). 

This article first appeared in Corporate Rescue & Insolvency, December 2018.

Key points

Despite the debtor's contention that his primary residence was in the United States, the Court held that it had jurisdiction to make a Bankruptcy Order following a petition presented by HMRC.

HMRC presented a bankruptcy petition against Robert Stayton on 30 May 2014 who owed approximately £653,640. The matter came before the court on a number of occasions before the final hearing, with judgment being handed down in November 2018.

The Court applied sections 423-425 of the Insolvency Act 1986 (IA) to the transfer of an interest in a Ukrainian television station. When analysing the Defendant's actions the Court considered the transaction was made for a prohibited purpose.

Background

Corporate reorganizations often involve waivers of inter-company debt. In general – although perhaps more obviously outside the group context – the waiver of a debt can be seen as producing a profit for the debtor company. Where this is reflected in profit and loss for accounting purposes, a taxable profit may arise in the hands of a UK resident debtor. Typically, however, debt waivers in the context of corporate reorganizations are not problematic.