The English Court has, for only the second time, made a compensation order under the Company Directors' Disqualification Act 1986 against a disqualified director.
Background
The Supreme Court has handed down a judgment which will be greeted with a collective sigh of relief from the insolvency world. In R (on the application of Palmer) v Northern Derbyshire Magistrates Court [2023] UKSC 38, the Supreme Court ruled that an administrator of a company is not an “officer” of that company.
High rates of insolvencies look set to continue as the latest quarterly insolvency statistics have been published for England and Wales. Whilst the statistics show a 2% dip from the second quarter of 2023, the number of insolvencies remains 10% higher than in 2022 and shows a return to pre-pandemic levels for compulsory liquidations and administrations. It is particularly striking that the first two quarters of 2023 represent the highest quarterly insolvencies since Q2 2009.
On 12 September 2023, the government published its long-awaited response to its consultation on the future of insolvency regulation.
The reforms will introduce:
In Hunt v Singh, the Court referred to the Supreme Court's landmark decision in BTI v Sequana (see our alert) in deciding when the directors' duty to creditors arose.
Background
Marylebone Warwick Balfour Management Limited (the Company), entered a tax avoidance scheme between 2002 and 2010 which the directors, on professional advice, believed to be valid.
On 5 July 2023 the Court sanctioned Prezzo Investco Ltd's (Prezzo) restructuring plan despite strong opposition by UK tax authority, HMRC.
HMRC has taken a more active approach to opposing restructuring plans and was successful in blocking the plans recently proposed by GAS and Nasmyth (see our alert).
On 29 June 2023, Mr Justice Michael Green in the High Court sanctioned a Part 26A restructuring plan proposed by First Clubs Limited (Fitness First), a wholly owned subsidiary of Maddox Holdings Limited, notwithstanding challenges from certain opposing creditors.
On 5 July 2023, the High Court sanctioned the restructuring plan proposed by Prezzo Investco Limited (theCompany) despite opposition from HMRC.
The English Court of Appeal has widened the scope of transactions defrauding creditors under section 423 of the Insolvency Act 1986 in a recent case, Invest Bank PSC v El-Husseini and others (Invest Bank).
Under s.423, the court will only make an order if it is satisfied that a transaction at an undervalue was entered into by a debtor for the purpose of putting assets beyond the reach of a person who may make a claim against them or otherwise prejudicing their interests in relation to such claim.
The government’s Insolvency Service published its Post Implementation Review of the Corporate Insolvency and Governance Act 2020 (CIGA) on 27 June 2023. The overall conclusion from the data collected, including a survey of insolvency practitioners, is that the permanent CIGA measures have been broadly welcomed by stakeholders and are seen as a positive addition to the UK’s rescue framework.