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

On Friday, the Florida Office of Financial Regulation closed Wakulla Bank, headquartered in Crawfordville, Florida, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Centennial Bank, headquartered in Conway, Arkansas, to assume all of the deposits of the failed bank.

On Friday, the Washington Department of Financial Institutions closed Shoreline Bank, headquartered in Shoreline, Washington, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with GBC International Bank, headquartered in Los Angeles, California, to assume all of the deposits of the failed bank.

On Friday, the Office of the Comptroller of the Currency closed First National Bank, headquartered in Rosedale, Mississippi, and appointed the FDIC as receiver.

Tuesday, the Financial Crisis Advisory Group (FCAG) issued its report on “the standard-setting implications of