When an employer is insolvent and administrators appointed, job losses are often an inevitable consequence. In this blog we look at the legal obligations arising where redundancies meet the threshold for collective consultation, and the implications for administrators arising out of the recent Supreme Court in the case of R (on the application of Palmer) v Northern Derbyshire Magistrates Court and another.

When does the legal obligation to collectively consult apply?

On 24 February, the Government published draft regulations that, if implemented, will impose new restrictions on pre-pack administration sales to connected parties. For all `substantial disposals' (which will include `pre-pack' sales) to connected parties, taking place within eight weeks of the administrators' appointment, the administrators will either need creditor consent or a report from an independent `evaluator'.

Context

Guidance for companies and company directors in Northern Ireland.

Overview

The adverse trading position caused by the COVID-19 situation is significantly impacting the majority of companies and is also bringing the duties of directors – particularly those relating to directors’ actions when a company is in difficulty or insolvent – into sharp relief.

With the measures in place to deal with the COVID-19 situation, volatility and disruption continue to affect Northern Ireland. As a leading full-service law firm, Arthur Cox is ideally placed to mobilise multi-disciplinary teams of lawyers to provide advice and support to organisations.