Media attention has waned from the initial deluge of front-page headlines regarding the Carillion collapse. It would therefore be easy to be ignorant of the ongoing disintegration of the web of Carillion companies beneath Carillion Plc, the ultimate parent company of the Carillion group, which (according to its latest accounts) holds interests in over 350 subsidiaries or joint ventures all over the world.

Court sets out procedure for contempt of court proceedings against bankrupt

For the first time, the Divisional Court has provided guidance on the correct procedure to be used in contempt of court cases falling under the Insolvency Act 1986 (IA).

The High Court held that a moratorium in relation to restructuring proceedings in Azerbaijan could not be extended in breach of the Gibbs rule, allowing two significant creditors to proceed with their claims in the English Courts.

There are two aspects of wrongful trading and misfeasance that are of interest (i) board directors (and those advising the board) must be aware of the duties that the directors are subject to in performing their role as directors and the liability that attaches to breach of those duties and (ii) companies may be affected by the wrongful trading/misfeasance of customers/suppliers which impacts on trading.

Case Alert - [2018] EWHC 95 (Comm)

Court considers whether deed of indemnity from insurer is adequate security for costs

Carillion, the second largest building contractor in the UK and the lead on a number of key public service contracts, entered into liquidation last week. Various commentators have highlighted poor governance at the company but would the revised UK Corporate Governance Code recently announced by the Financial Reporting Council (FRC) have prevented its collapse?

What caused the collapse?

A great deal of insolvency litigation is funded by non-parties to a claim – for example, by a creditor or an “after the event” (ATE) insurer. Ordinarily such arrangements and their precise terms are confidential and are not required to be fully disclosed to a counterparty in litigation. In the recent case of Re Hellas Telecommunications (Luxembourg) [2017] EWHC 3465 (ch) (“Hellas”), the court considered the extent to which the underlying details of the litigation funders should be disclosed for the purposes of a security for costs application.

The Insolvency community in Scotland has watched with interest the case of Grampian MacLennan's Distribution Services Ltd v Carnbroe Estates Ltd and in particular Lord Woolman's eyebrow raising opinion at first instance that a distressed sale by a company of its major asset (an industrial unit comprising a warehouse, vehicle workshop and yard with gatehouse) had not constituted a gratuitous alienation where the sale has been off market at a price of £550,000 whereas the property had been valued at £1,200,000 on the open market or at £800,000 on a restricted 180 day marketing period

A recent TCC decision has concluded that the contractor insolvency provisions of the JCT form continue to apply after a termination by the contractor for repudiation. This conclusion may give rise to surprising results and potentially allow an employer to claim from the contractor additional amounts incurred in completing the works with a third party even after termination for the employer’s own default and/or repudiation.

UK burger restaurant chain, Byron Burger, has proposed a company voluntary arrangement (CVA) with its creditors in a bid to restructure the company's finances and rescue the business.

The creditor vote is due to take place on 31 January, with the CVA requiring at least 75% creditor consent for approval. The company is understood to be in talks with creditors and the proposed CVA is thought to be centred around the closure of underperforming restaurants and rent reductions at other branches.