The High Court has provided useful guidance on the interplay between the JCT regime for payment and claims in insolvency proceedings, in the recent case of Levi Solicitors LLP v Wilson and another [2022] EWHC 24 (Ch).

The application

In Re AFM (1932) Ltd (in liquidation) [2021] EWHC 3460 (Ch) the court confirmed that where an applicant is already contractually entitled – as against another party - to be reimbursed, together with interest, by that other party in an amount equivalent to the value transferred by that applicant under a related transaction, there cannot be a transaction at an undervalue pursuant to section 238 of the Insolvency Act 1986.

Facts

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.

In FCA v Carillion [2021] EWCH 2871 (Ch), the High Court has confirmed that Financial Conduct Authority (FCA) enforcement action against Carillion Plc (in Liquidation) (Carillion) pursuant to certain provisions of the Financial Services and Markets Act 2000 (FSMA) does not constitute an “action or proceeding” and therefore falls outside of the scope of the statutory stay imposed by section 130(2) of the Insolvency Act 1986 (the Act).

Section 130(2) of the Act

Regulations have been published which, from 1 October 2021, will change the current restrictions on the use of winding up petitions (the regulations). A link to the regulations can be found here.

In summary, the regulations partially lift the temporary restriction on the use of winding up petitions imposed by the Corporate Insolvency and Governance Act 2020 and provide that:

Following a government announcement on 16 June, the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2021 (the Regulations) have been laid before Parliament, coming into force on 22 June.

After a somewhat leisurely start, case law regarding the new restructuring plan in Part 26A of the Companies Act 2006 now seems to be picking up pace.

On 13 January 2020, the High Court sanctioned the restructuring plans proposed by three UK companies in the DeepOcean group, under Part 26A of the Companies Act 2006.

On 29 January 2020, the Insolvency Service published its quarterly insolvency statistics for October to December 2020 (Q3 2020).