The Court of Appeal has recently considered the status of contingent assets within the balance sheet test for insolvency in the context of a company’s inability to pay its debts. Under Section 123 Insolvency Act 1986, a company is deemed unable to pay its debts if its assets are less than its liabilities including contingent liabilities but nothing is said about the status of contingent assets.
Until recently the oil and gas sector has not been on the restructuring communities radar. However, last year global oil prices hit an all-time low, which led to a record number of insolvencies in the industry. Consequently in conjunction with Lexis Nexis we have produced the Guide to insolvency in the UK oil and gas industry.
The UK’s EU Referendum on membership is looming on the horizon – What are the legal implications of a so-called “Brexit” for restructuring and insolvency professionals?
The EU Referendum Act 2015 obtained Royal Assent on 17 December 2015 and provides for the following question to be put forward for voting in a referendum in the UK until the end of 2017: “Should the United Kingdom remain a member of the EU or leave the EU?”
High Court says "Yes"
Need to know
In a win for creditors of insolvent companies, on 10 December 2015 the High Court determined that the obligation of a liquidator under section 254(1)(d) of the Income Tax Assessment Act 1936 (Cth) (1936 Act) to retain sufficient funds to pay tax on assets realised during the winding up only arises after a tax assessment has been made. If the funds are distributed prior to a tax assessment being made, then the obligation does not arise.
The director at the heart of the Carrington Wire pension fund deficit saga has been disqualified for a period of 12 years.
Background
The "running account" defence to an unfair preference claim is a fragile flower. In a recent decision, the Queensland Court of Appeal has reminded solvent counterparties that suspension of a customer's trading account will probably break the "running account", exposing a solvent counterparty to greater unfair preference risk.
Need to know
The recent TMA Global Annual Conference in Scottsdale Arizona gave us a great opportunity to meet with friends and colleagues old and new and swap intel and war stories! The buzz at the conference was around the oil and gas sector. Drilling down: Turmoil in Oil and Gas was the panel moderated by our very own Michael Cuda. It created immediate and ongoing comment, not just at the conference but also in the wider media. See web link from
A recent decision of the NSW Court of Appeal demonstrates the importance for security trustees tocarefully consider and understand their obligations in an enforcement scenario.
Need to know
In March 2014 the European Commission issued a Recommendation considering a new approach to business failure and insolvency, targeting efficient restructuring of viable enterprises in financial difficulty and a second chance for honest entrepreneurs.