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

The Bottom Line

The District Court for the Northern District of Texas recently held in Segner v. Ruthven Oil & Gas, LLC, No. 3:12-CV-1318-B, 2018 WL 3155827 (N.D. Tex. June 28, 2018) that failure to comply with a disclosure law when documenting a transaction does not deprive a defendant in a fraudulent transfer action from asserting a good faith defense.

What Happened?

The Bottom Line

The Bottom Line

The Bottom Line

The Bottom Line

The Delaware District Court affirmed the bankruptcy court’s decision that the combination of a narrow arbitration provision and the bankruptcy court’s reservation of jurisdiction warranted denial of a motion to compel arbitration. The specific language of the arbitration provision, combined with the use of an accounting term of art, narrowed the scope of the arbitration provision sufficiently to rebut the presumption of arbitration under the Federal Arbitration Act.

What Happened?