With the gradual opening of energy supply markets allowing new energy providers to challenge the established providers and bring increased competition to the market, the last two decades have seen an increase in smaller energy providers entering the market and sharing a growing customer base. But what happens to the customers when an energy provider becomes insolvent?
In Stanford v Akers the BVI Court of Appeal addressed standing in the context of applications under Section 273 of the Insolvency Act 2003, whereby an aggrieved person can ask the court to reverse or vary a liquidator's decision.
The liquidators of Chesterfield entered the company into a global settlement agreement with Deutsche Bank AG and Kaupthing, which included the admission of Kaupthing's claim in Chesterfield's liquidation.
In separate but related proceedings, the BVI courts have permitted an applicant to inspect documentation relating to the liquidation of certain BVI companies.
In Robert Tchenguiz v Rawlinson & Hunter Trustee SA (the TFT Trust claim) Tchenguiz sought delivery of all proof of debt and claim documentation submitted by the defendant trustees to the joint liquidators in the liquidation of the companies.
The case of Davey v Money and Anor (2018) EWHC 766 (Ch) should serve as a gentle warning to secured creditors to be aware of the level of their involvement in the administration of a customer.
Background
Angel House Development Limited (“AHDL“), a property development company, borrowed £16 million from Dunbar Assets Plc (“Dunbar“) in order to fund the purchase and redevelopment of a property, Angel House, in Tower Hamlets. Dunbar took security for the loan(s) in the form of a debenture.
Grant Thornton were appointed as receivers over a BVI company under Section 43 of the Arbitration Act 2013 to preserve the value of the company pending the determination of foreign arbitration proceedings. The defendant in the arbitration owned the shares of the BVI Company.
In the case of Delco Participation BV v Green Elite Limited [2018] the Court of Appeal considered the test for appointing liquidators to a company following an alleged loss of substratum.
HM Revenue & Customs (“HMRC”) has issued a consultation entitled “Tax Abuse and Insolvency: A Discussion Document” on how it proposes to confront those who misuse insolvency law as a means of avoiding or evading their tax liabilities.
A recent decision of the High Court (Goel and another v Grant and another [2017] EWHC 2688 (Ch)) has provided a useful reminder that care must be taken when administrators enter into pre-contract negotiations and the risk of inadvertently entering into a binding contract before terms are finalised. It also deals with the risks of disposing of assets, even those that are difficult to value, without due process.
The Facts
An out-of-hours office appointment of an administrator, although not unusual, is not a regular occurrence in the world of insolvency. It is however, exactly what happened at 4am on Monday 2 October, as Britain’s longest surviving airline brand ‘Monarch’ entered administration. The collapse of the airline comes as a result of mounting cost pressures in an increasingly competitive market and is the third European airline insolvency in 2017, following Air Berlin and Alitalia.
The recent Court of Appeal decision in Saw (SW) 2010 Ltd and another v Wilson and others (as joint administrators of Property Edge Lettings Ltd) is the first case to address the effect of automatic crystallisation of an earlier floating charge upon a later floating charge.