The Insolvency Service released the quarterly insolvency statistics for July - September 2023 on 31 October, painting a picture of growing corporate distress. This period saw a total of 6,208 company insolvencies, which together with Q2 2023 marks the highest number of quarterly insolvencies since the midst of the financial crisis in 2009.

Although a comparison with Q2 figures shows a slight reduction of 2% in overall insolvencies, the figures for Q3 showed a marked rise in both compulsory liquidations (14% up on Q2) and administrations (11% higher than Q2).

In the matter of Bleecker Property Group Pty Ltd (In Liquidation) [2023] NSWSC 1071, appears to be the first published case that considers the question of whether an order can be made under section 588FF(1)(a) of the Corporations Act 2001 (Cth) by way of default judgment against one defendant where there are multiple defendants in the proceedings.

Key takeaways

In this week’s TGIF, we consider Hutton, in the matter of Caydon Flemington Pty Ltd (Receivers and Managers appointed) (In liq) [2023] FCA 796, a Federal Court decision concerning the grant of an extension after the ‘critical time’ for the vesting of a security interest.

Key takeaways

After a sharp rise in May, it came as little surprise to see corporate insolvency figures continue their march upwards. A total of 2,163 registered companies entered an insolvency proceeding in June 2023: the second highest figure since January 2019 and 40% higher than the equivalent for June 2022.

In an earlier article we discussed The Insolvency Service's proposals for the UK to be an early adopter of two new "model laws" published by UNCITRAL relating to insolvency, namely the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ) and the Model Law on Enterprise Group Insolvency (MLEG).

The recent judgment in City Gardens Ltd v DOK82 Ltd [2023] EWHC 1149 (Ch) serves as a useful reminder of the extent of, and principles governing, the English court’s jurisdiction to wind up a company on the basis of inability to pay its debts.

Background

City Gardens Limited (C), and DOK82 Ltd (D), had entered into a “memorandum of understanding” (MoU) in relation to a significant debt owed by D to C.

The latest insolvency figures for May show insolvencies continuing to increase, with construction and retail being among the hardest-hit sectors. Company voluntary liquidations continue to top the table, accounting for 85% of the total 2,552 insolvencies for the last month. Compulsory liquidations are also on the rise, particularly driven by HMRC. Small and micro businesses (with annual sales of less than £1m) account for around 99% of all liquidations, according to PWC.

In the recent case of Avanti Communications Limited (in administration) [2023] EWHC 940 (Ch), the High Court revisited the perpetually knotty question: what level of control is necessary for a charge over assets to take effect as a fixed, rather than floating, charge?

This week’s TGIF considers In the matter of BCA National Training Group Pty Ltd (in liq) [2023] NSWSC 366, in which the priority between a liquidator’s remuneration and expenses claims and the claims of preferred creditors was clarified.

Key takeaways

This week’s TGIF concerns Kennedy Civil Contracting Pty Ltd (Admins Appt) v Richard Crookes Construction Pty Ltd [2023] NSWSC 99, in which the New South Wales Supreme Court determined that an insolvent company’s creditors could properly make a DOCA to maintain the right under security of payment legislation to recover amounts that would have been lost on entry into liquidation.

Key takeaways