Summary

The case provides guidance for liquidators as to the appropriate exercise to conduct when deciding whether the threshold of 25% in value of creditor claims has been reached in support of a request for a creditors’ meeting under s 171.

Key point

• A liquidator is not required to apply a ‘strict proof’ test to a creditor’s claim at the requisition stage of a creditors meeting.

The facts

In November 2014, the company entered into a creditor’s voluntary liquidation.

The Investment Bank Special Administration Regime (SAR) was introduced in 2011 in response to difficulties faced in the Lehman Brothers administration. Following a review of the regime by Peter Bloxham in 2014, and a Government consultation in 2016, the Treasury has introduced draft regulations to improve the regime - The Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017.

In two months' time the Insolvency (England and Wales) Rules 2016 will come into force (with effect from 6 April 2017). This date has been long in the making the first draft of the new rules was published in September 2013.

The new rules are not intended to change the law. Their main aim is to consolidate provisions in order to reduce repetition, ensure that there is a more logical structure and modernise and simplify the language (including gender neutral drafting).

This briefing highlights a few of the key changes.

The Facts

An administrator was appointed over a company out of court and the administration extended on a handful of occasions. The administrator was then replaced by block transfer, but the administration subsequently expired before it was concluded.

The new administrator therefore applied for a new administration order to apply retrospectively from the date of expiry of the old order.

In the recent case of SCI Senior Home (in Administration) v Gemeinde Wedemark, Hannoversche Volksbank eG, the Court of Justice of the European Union handed down judgment on the question of whether a right in rem created under national law should be considered a "right in rem" for the purposes of Article 5 of the Council Regulation (EC) 1346/2000 on insolvency proceedings (the "Insolvency Regulation").

Background

In the recent case of Gillan v HEC Enterprises Ltd (in administration) and Ors [2016] EWHC 3179 (Ch), the High Court considered (1) in what circumstances administrators can recover costs and expenses incurred in dealing with trust property and (2) how the administrators’ costs in applying for a Berkeley Applegate order and other litigation were to be dealt with.

Background

PricewaterhouseCoopers sought to recover their costs in complying with disclosure orders obtained by the Liquidators of Saad Investments Co Ltd and Singularis Holdings Ltd. The disclosure orders were ultimately set aside but the costs appeal was rejected by the Court of Appeal of Bermuda.

A prominent High Court case involving TV presenter Trinny Woodall and her late ex-husband’s creditors has provided a useful insight into the handling of debts following a divorce.

Ms Woodall married Johnny Elichaoff in 1999 and after a ten year marriage, the couple divorced in 2009.

During the divorce settlement it was agreed that Mr Elichaoff would pay Ms Woodall and their daughter £24,000 a year and repay a sum of £1.4 million to her.

However, just nine days before the divorce was finalised Mr Elichaoff was made bankrupt and the repayment was later declared void.

This is the third in a series of articles highlighting the changes to be brought in by the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (Amendment Ordinance). Since our last article, 13 February 2017 has been announced as the date when the Amendment Ordinance will come into effect. The Amendment Ordinance makes amendments to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (CWUMPO) and the Companies (Winding Up) Rules (CWUR).

Transactions Defrauding Creditors

In JSC BTA Bank v Ablyazov and another the Court considered the transfer of £1.1million from Mukhtar Ablyazov to his son in 2009 at a time when his son was 17. The money was used by the son for investments in support of his Tier 1 investor visa. The investments matured in March 2014 and were held in the son’s account.