The recent decision in Re Swan Services Pty Limited (in liq)
The Housing and Planning Act 2016 (the “Act”) introduces special administration procedures for social housing associations which aim to protect the level of social housing in the UK. The new housing administration orders (“HAOs”) create an additional objective for insolvency practitioners to try to keep social housing in the regulated housing sector to maintain levels of social housing.
Consumers could be set to jump up the insolvency hierarchy if Parliament backs the latest Law Commission recommendations.
The Law Commission’s report, Consumer Prepayments on Retailer Insolvency, recommends, among other things, that consumers who prepay for goods or services over £250 in the six months prior to a formal insolvency process should be paid out as preferential creditors instead of unsecured creditors.
During contract negotiations parties usually agree what law and which courts will determine any disputes arising from that contract. This brings certainty for the parties. However that certainty can vanish if one party is a foreign registered company and becomes insolvent – the other party may suddenly become exposed to unexpected foreign insolvency law. At this point, the drafting of a jurisdiction clause can be worth millions.
This is the situation in the recent case of Global Maritime Investments Cyprus Limited v O.W. Supply & Trading A/S [2015] EWHC 2690 (Comm).
The Third Parties (Rights Against Insurers) Act 2010 (“TPR”) will finally come into force on 1 August 2016, making it easier for third parties to bring claims against insurers of insolvent companies. It has taken more than six years, spread over three separate governments and was amended even before it came into force, but TPR will finally replace the Third Parties (Rights Against Insurers) Act 1930 (the “1930 Act”).
The Background
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 "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
Three former directors of failed UK parcel delivery company City Link have recently been delivered the bad news that they will face criminal charges over redundancies made during the Christmas period last year. They have been charged with failure to notify the Secretary of State of the proposed redundancy of City Link’s employees as required under section 193 of the Trade Union and Labour Relations (Consolidation) Act 1992. Notification is normally given to the Government by submitting an HR1 form to the Insolvency Service
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