Although the law, rules and procedures governing corporate insolvency in Scotland and England and Wales are similar in many respects, Scotland has a separate legal system and there are some important differences in the provisions and rules applicable north and south of the border. The differences include:
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.
Floating charges are common features of finance transactions both in Scotland and in England, and share some characteristics, but these securities have different origins (the Scottish floating charge is a creation of statute while the English floating charge derives from common law) and other key differences which we outline below.
The Moveable Transactions (Scotland) Bill introduces a raft of fundamental changes designed to modernise and improve the law of Scotland in relation to transactions concerning moveable property.
A predicted wave of insolvencies on the horizon has been a recurring theme in the UK press since the start of the first Covid-19 lockdown. Most people would have predicted that forced closure of businesses and the restriction on consumers' ability to spend would lead to an increase in business and personal insolvency numbers. In reality, the wave didn't appear - at least not yet. In this blog we discuss the reasons why and whether the trends we are seeing might suggest a wave is coming in 2023.
What stopped the wave?
Alternative Dispute Resolution (ADR) is the overarching name given to the different processes used to determine disputes between parties out with a formal court process. ADR is becoming more popular, but is not as widely used by insolvency practitioners (IPs) in the UK to resolve disputes arising from an insolvency event as it perhaps should be.
An individual ceased trading his Scaffolding firm in Sunderland in December 2019 and immediately began employment with a third party; despite which the enterprising former scaffolder thought it would be a good idea in May 2020 to apply for a £50,000 bounce back loan from HM Government in respect of his previous business. Unsurprisingly, the funds were not applied to the Scaffolding business (which had ceased trading) and instead were used to repay third parties.
What is a pre-pack?
Pre-pack is the term used to describe an arrangement whereby the sale of all or part of a company’s business and/or assets is negotiated and agreed before an insolvency practitioner (IP) is appointed, with the relevant documentation being signed and implemented immediately or shortly after the appointment is made.
Following the demise of receiverships, administration is the insolvency process most commonly used to achieve a pre-pack sale.
Why are pre-packs used?
The recent Accountant in Bankruptcy v Peter A Davies case examines how a family home is dealt with following sequestration of an individual. The sheriff's comments about the case suggest there could be room for improvement in the Bankruptcy (Scotland) Act 1985, to make the process clearer for everyone involved.
Case background
Significant changes will come into force after 31 December if no agreement is reached (or is not finalised and ratified) before the end of the transition period for cross-border insolvency proceedings. Importantly, the changes will alter the grounds for jurisdiction to open insolvency proceedings in the UK and impact the recognition of those UK insolvency proceedings in the EU.