Today the Government published draft provisions for inclusion in the Finance Bill which will amend the Insolvency Act 1986 and grant HMRC preferential status on insolvency. A status that was removed in 2003 but which will be re-instated (in part) from 6 April 2020.
Despite huge concern from the lending market, voiced in responses to the Government’s consultation on this measure, the only material change we can see is confirmation that preferential status will not apply to insolvency proceedings commenced before 6 April 2020.
The proposal to reinstate Crown preference in insolvency has met resistance from all angles; the insolvency profession, turnaround experts, accountants, lawyers and funders. But despite HMRC’s bold statement in its consultation paper that the re-introduction of Crown preference will have little impact on funders, it is clear following a discussion with lenders that it may well have a far wider impact on existing and new business, business rescue and the economy in general than HMRC believes.
In the holiday season many of us jet-set to foreign shores – but do we ever think about how we might get home if our budget airline goes bust or are we just hunting for the best deals to make the pound stretch further?
The last decade has seen a number of airlines collapse or be swallowed up by competitors:
The securities safe harbor protection of Bankruptcy Code (“Code”) § 546(e) does not protect allegedly fraudulent “transfers in which financial institutions served as mere conduits,” held the U.S. Supreme Court on Feb. 27, 2018. Merit Management Group LP v. FTI Consulting Inc., 2018 WL 1054879, *7 (2018). Affirming the Seventh Circuit’s reinstatement of the bankruptcy trustee’s complaint alleging the insolvent debtor’s overpayment for a stock interest, the Court found the payment not covered by §546(e) and thus recoverable. The district court had dismissed the trustee’s claim.
The Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”) require each corporate party in an adversary proceeding (i.e., a bankruptcy court suit) to file a statement identifying the holders of “10% or more” of the party’s equity interests. Fed. R. Bankr. P. 7007.1(a). Bankruptcy Judge Martin Glenn, relying on another local Bankruptcy Rule (Bankr. S.D.N.Y. R.
The safe harbor protection of Bankruptcy Code (“Code”) §546(e) does not protect “transfers that are simply conducted through financial institutions,” held the U.S. Court of Appeals for the Seventh Circuit on July 28, 2016. FTI Consulting Inc. v. Merit Management Group LP, 2016 WL 4036408, *1 (7th Cir. July 28, 2016).
As the country recovers from the shock outcome of last Thursday’s Referendum, the question which Restructuring professionals must now consider is “what does Brexit mean for me?”. The truth is that nobody really knows. The Referendum decision is not legally binding on the UK Government and the process of the UK leaving the EU will only start once the UK has served formal notice on the EU pursuant to Article 50 of the Treaty on the European Union. This will start a two year negotiation period to effect Brexit.
On 23 June 2016 a 52% majority of the British people voted in favour of leaving the European Union. It seems likely that the immediate effect of the Brexit vote will be a degree of turmoil in the financial markets, involving, for instance a devaluation of Sterling against the Euro and of the Euro against the USD.
Chances are those well-known eloquent lyrics have stirred up some patriotic spirit from somewhere deep within even the most sporting averse of us.
With the 2016 summer of sport fast upon us the effect of the Euros, Wimbledon and the Olympics could have a significant impact on the economy (and the nerves) of the nation.
In case you have just returned from Outer Space- the UK Government has announced that it is holding a referendum on 23 June 2016 on the question:
“Should the United Kingdom remain a member of the EU or leave the EU?”
In the meantime, whilst the UK decides whether to Brexit or not, the EU Commission is taking a “business as usual” stance.