Key Points

• An administrator may be able appeal an order restoring a company following dissolution
• The court has jurisdiction to backdate a winding up order made following restoration to the date of dissolution
• The court must exercise its discretion to do so with extreme caution

The Facts

Client Connection Limited (“Company”) was placed into administration and Ms Sharma (“A”) was appointed as administrator. Following a pre-pack sale of the business of the Company, A moved the Company to dissolution.

Key Points

• Court considers the ownership of assets situated at premises owned by the bankrupt in the context of limited relevant evidence
• Court emphasises the importance of joining the correct parties to litigation

The Facts

Key points

• Section 236 (inquiry into company’s dealings) does not have extra-territorial effect
• Section 237(3) (examination) only has extra-territorial effect where appropriate machinery exists in the foreign jurisdiction
• Taking of Evidence Regulation not available where litigation not commenced or contemplated

The facts

Key Point

The mere fact that the law of the country in which an asset is situated does not recognise the trust concept does not necessarily invalidate the trust at least as far as English Courts are concerned.

The Facts

Key Points

• The principle of modified universalism (being the principle underlying the common law power to assist foreign insolvency proceedings) continues to exist
• There is a common law power to order production of information to assist foreign insolvency proceedings
• Common law assistance does not enable office holders to do something they would not be able to do under the insolvency laws by which they are appointed

The Facts

Key Points

• Court cannot grant relief under the UK Cross Border Insolvency Regulations 2006 (CBIR) where it could not provide such relief in a domestic insolvency.
• Even if such option were possible, court would not do so where a contract is governed by English law.
• Possibility of effectively applying provisions of foreign law under the CBIR restricted.

The Facts

Key Points

Where a sole director and shareholder of a company had breached fiduciary duties he could not ratify the breach if the company was insolvent;

Claims against the company in liquidation by dishonest assisting parties could not be set off under rule 4.90 Insolvency Rules against any liability they had in damages for that assistance.

The Facts

The Court of Appeal has decided that rent accruing during a period of administration should be treated as an expense of the administration, irrespective of the date on which it falls due for payment. Administration expenses are paid by administrators in priority to liabilities owed to holders of security.

Comfort letters can be a useful tool for providing an assurance of support from a parent to a subsidiary company. In some cases they help inform the decision of the board of a subsidiary and its continuing trade. It's possible for such letters to form binding obligations in law, if carefully considered and drafted.

Key points

• The High Court has ruled that, where a tenant goes into administration, rent which is payable in advance and falls due before the commencement of the administration is not recoverable by the landlord as an administration expense
• Landlords must take their place with other unsecured creditors in relation to sums payable before the appointment of administrators, even if they relate to a period during which the administrators had use of the property

Background