In Uralkali v Rowley and another [2020] EWHC 3442 (Ch) – a UK High Court case relating to the administration of a Formula 1 racing team – an unsuccessful bidder for the company's business and assets sued the administrators, arguing that the bid process had been negligently misrepresented and conducted.

The court found that the administrators did not owe a duty of care to the disappointed bidder. It rejected the claimant's criticisms of the company’s sale process and determined that the administrators had conducted it "fairly and properly" and were not, in fact, negligent.

In Uralkali v Rowley and another [2020] EWHC 3442 (Ch) – a UK High Court case relating to the administration of a Formula 1 racing team – an unsuccessful bidder for the company's business and assets sued the administrators, arguing that the bid process had been negligently misrepresented and conducted.

The court found that the administrators did not owe a duty of care to the disappointed bidder. It rejected the claimant's criticisms of the company’s sale process and determined that the administrators had conducted it "fairly and properly" and were not, in fact, negligent.

Executive summary

On a UK company’s insolvency, the UK tax authority (HMRC) will become a preferential creditor in respect of certain unpaid taxes (Crown Preference) with effect from 1 December 2020. Despite lobbying against the move (including in light of the COVID-19 pandemic), the UK government has persisted with the change, perhaps in an attempt to shore up its tax take.

The reform in context

EXECUTIVE SUMMARY

Executive Summary

The United Kingdom Department for Business, Energy and Industrial Strategy has announced that certain temporary measures put in place under the Corporate Insolvency and Governance Act 2020 (CIGA), which became law on 26 June 2020, will be extended.

Statutory Demands and Winding-Up Petitions

Executive Summary

• New legislation will introduce permanent and temporary reforms to the UK restructuring and insolvency regime
• Permanent reforms: company moratoriums; restructuring plans; the prohibition of insolvency termination clauses in supply contracts
• Temporary reforms: suspension of the director wrongful trading offence; restriction on the service of statutory demands and winding up petitions

Overview

The UK Government announced on Saturday 28 March 2020 that it intends to amend UK insolvency law to suspend the offence of wrongful trading by directors of UK companies and to give UK companies the breathing space to allow them to keep trading while they explore options for rescue.

Background

Current insolvency rules stipulate that directors of limited liability companies can become personally liable for business debts if they continue to trade when uncertain about whether their businesses can continue to meet their debts. These rules will be suspended.

Summary and Key Takeaways

In a consultation issued by the UK tax authority, HM Revenue & Customs (HMRC), on 26 February 2019, a change in the order of asset distribution in the insolvency of UK companies has been proposed. The amendments would newly favour certain taxes collected and held by an insolvent entity ahead of certain secured and unsecured creditors and would come into force in April 2020.