The revised Insolvency Practice Direction has been published and approved with effect from 4 July. This replaces the PD published in April this year. The revisions (primarily dealing with the distribution of specialised insolvency work) widen the scope of work which can be undertaken in local courts, whilst also giving the ability to transfer insolvency cases back to the local hearing centres if there is sufficient expertise to deal with the matter.

The Insolvency Service intends to publish a new guidance notice to address the issues faced by employers in dealing with collective consultation when a company is facing insolvency, following consultation with the industry last year.

The guidance note is expected to require insolvency practitioners to notify the government in advance of collective redundancy proposals and to comply with the requirement to consult when seeking to rescue or wind up a business.

It is no great surprise that following the collapse of Carillion and with other retail businesses teetering on the edge, insolvency and corporate recovery is back in the news.

Some of the biggest casualties of entities like Carillion are the employees. Luckily, in the Carillion failure many jobs have been saved, but there is still a residual cost to employees who have to submit claims to the National Insurance Fund and the liquidator to recover payments for unpaid wages, holiday and sick pay.

Directors of a company in financial distress will often turn to their professional advisors to assist in making decisions about the company’s future; whether that be their lawyers, accountants, bank, tax advisors or insolvency professionals.

The Bankruptcy Code prohibits a chapter 13 debtor from modifying a mortgage lien on the debtor's principal residence. Even in situations in which a secured creditor fails to file a proof of claim or otherwise participate in the bankruptcy proceeding, the Bankruptcy Code allows a secured creditor's lien on a primary residence to pass through the bankruptcy unaffected. However, a recent decision from a bankruptcy court in Texas illustrates the risks to secured creditors of blind reliance on these statutory protections.

A common issue that arises in many bankruptcy cases is whether a creditor who refuses to return collateral that he repossessed prior to the petition date violates the automatic stay. In February, the Tenth Circuit widened a circuit split by adopting the minority position that to violate the automatic stay in bankruptcy a creditor must take action, not merely retain the property of the estate. The Bankruptcy Code's automatic stay provision, 11 U.S.C. 362, prohibits any post-petition "act to obtain possession of property of the estate or ...

Major changes to bankruptcy rules that govern the administration of consumer bankruptcy cases, and Chapter 13 cases in particular, were recently approved by the Supreme Court and transmitted to Congress.1 After several years of drafting and debate by the rules committee, these rule amendments will become effective December 1, 2017.

On March 9, 2017, a bankruptcy court in New York became the latest to weigh in on the developing circuit court split regarding whether modification of mortgages should be permitted under 11 U.S.C.

The United States District Court for the District of Massachusetts (the District Court) recently issued an opinion in the Paul Sagendorph bankruptcy case reversing the Bankruptcy Court's holding that a debtor can force a secured creditor to take title to its collateral in complete satisfaction of the creditor's secured claim.1 In reversing the decision of the Bankruptcy Court, the District Court held that the plain language of Sections 1322(b)(9) and 1325(a)(5)(C)2 does not empower a debtor to force a secured creditor to accept title to its collateral over that creditor's objection.3

On May 4, 2015, the Supreme Court of the United States issued an opinion regarding a Chapter 13 bankruptcy case from the United States Court of Appeals for the First Circuit (the “First Circuit”).1 The question on appeal was whether debtor Louis Bullard (“Bullard”) could immediately appeal the bankruptcy court’s order denying confirmation of his proposed Chapter 13 payment plan (the “Plan”).2 The Court held that denial of confirmation of a debtor’s plan is not a final, appealable order.3  

Case Background