A free-standing moratorium for financially distressed but ultimately viable companies was introduced in 2020. It is sometimes called a Part A1 moratorium, after the part of the Insolvency Act 1986 which provides for it.

Overview

• The UK Supreme Court issued a recent decision in R (on the application of Palmer) v Northern Derbyshire Magistrates Court and Another [2023] UKSC 38.
• Crucially, the Court determined that an administrator is not an officer of the company within the meaning of the phrase 'any director, manager, secretary or similar officer of the body corporate', for the purpose of section 194(3).

Contents

R (on the application of Palmer) v Northern Derbyshire Magistrates Court and Another [2023] UKSC 38

R (ON THE APPLICATION OF PALMER) V NORTHERN DERBYSHIRE MAGISTRATES COURT AND ANOTHER [2023] UKSC 38

Insolvency practitioners will welcome the Supreme Court’s recent decision that an administrator of a company appointed under the Insolvency Act 1986 (IA) does not fall within the ambit of section 194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992) (TULRCA) and therefore cannot be held personally liable under criminal law for the company’s failure to give notice to the Secretary of State in accordance with section 193 of TULRCA.

The Calcutta Cup represents a long and competitive rugby rivalry between the great neighbours that are Scotland and England. Last year, Scotland retained the trophy in a hard-fought match at Twickenham with victory being sealed in the last minute with a try from Duhan van der Merwe who, being 6ft 4 inches, blond and in the peak of physical health, is a fair representation of your average Scotsman.

The Consumer Duty is one of the most significant pieces of regulation to land in the financial services industry for some time and represents a major shift in how firms will need to view customer outcomes and proactively address harm in the retail market. For Insolvency Practitioners (IPs) appointed over a regulated firm that has products within the scope of the duty, this will form part of the regulatory obligations with which the firm (and the IP) will need to ensure compliance.

The recently reported decision of ICC Judge Greenwood in Grove Independent School Ltd, Re [2023] EWHC 2546 (Ch) (Grove) provides some clarity on the test to be applied by the court in deciding whether to exercise discretion to grant an order for a Part A1 moratorium. In this case, the company in question was also faced with a winding-up petition, presented by His Majesty's Revenue & Customs (HMRC).

Between 1 April and 30 June 2023, there were 6,342 registered company insolvencies, which is the highest number of insolvencies since the second quarter of 2009, and a 9% increase on the previous quarter of 2023.

Background

In R (on the application of Palmer) (Appellant) v. Northern Derbyshire Magistrates Court and another (Respondents), the Supreme Court held that an administrator appointed under the Insolvency Act 1986 (IA 1986) is not an "officer" of the insolvent company under section 194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

The UK government has updated the 30-year-old special administration regime for water companies making it possible to rescue water companies.

The new legislation (plus two draft instruments) aims to modernise water company insolvency legislation in the face of the growing challenges in the industry including higher operating costs, claims over sewage pollution and significant debt burden (Thames Water owes £18.3 billion).

New special administration regime

On 23 January 2024, the Court of Appeal overturned the High Court's sanction of Adler Group's (Adler) restructuring plan (the Plan) (see our alert). This much anticipated judgment provides clarity on the court's discretion to sanction a plan where there are dissenting classes of creditors.

Background

The Plan envisaged: