It’s hard to write a pithy article about the transfer of proceedings from the High Court in London to the Central London County Court (CLCC), but given its wide-reaching implications I thought it was worth a try.
The High Court has approved a £3bn rescue package for Thames Water to plug the leak in the water company's finances while it seeks to secure a wider restructuring deal. This is stage one in Thames Water's plan to restructure its £19bn debt mountain and secure £5bn in equity investment, with the initial cash injection urgently required to service £200m of debt which falls due on 24 March.
In a recent ruling (NMC Health PLC (in Administration) v Ernst & Young LLP [2024] EWHC 2905 (Comm)), the High Court declined to order disclosure of witness statements and transcripts of interviews conducted by administrators during their initial investigations, citing litigation privilege.
Litigation privilege
The Federal Court of Australia has recently delivered judgment in the case of Deputy Commissioner of Taxation v ACN 152 259 839 Pty Ltd [2024] FCA 1489. The Court held that in some circumstances, a statutory demand can be validly served on a perceived temporarily empty company office.
On 20 May 2024, an ATO officer purported to serve ACN 152 259 839 Pty Ltd (the Company) with a statutory demand and an accompanying affidavit by leaving the documents at the Company’s registered office.
How to keep your head above water in the face of economic uncertainty, as told by Lucy Trott, Senior Associate, Stevens & Bolton.
Businesses in turmoil dominate the financial press. That depiction of financial distress is supported by monthly figures which make plain that the financial legacy of the Covid-19 pandemic is an increasing number of insolvencies. It is a trend which does not show any sign of abating.
The Federal Court in Hema Maps Pty Ltd v HemaX Digital Pty Ltd, in the matter of HemaX Digital Pty Ltd [2024] FCA 1127, appointed a provisional liquidator to preserve the status quo until the determination of a winding up application. This winding up application was due to a deadlock and an irreparable breakdown in relations between shareholders, and mismanagement of the company.
Key Takeaways
What happens to a company at the end of an administration is a question that probably only keeps insolvency anoraks up at night.
There are a limited number of potential options, with the rescue of the company as a going concern being the number one objective to which all administrators aspire. However, more often than not, an administration will end with the company entering liquidation or, where the company has no property to permit a distribution to creditors, the dissolution of the company.
Boris Becker was originally made bankrupt in June 2017. In the ordinary course, a debtor is made bankrupt for a period of one year, and upon the anniversary of the bankruptcy order they are automatically discharged. While a bankrupt is undischarged, they are subject to various restrictions e.g. they are unable to act as company director or be involved in the management, promotion or formation of a business. Once discharged, the debtor can (in theory) start to rebuild their life afresh while their pre-bankruptcy assets remain in the hands of their trustee in bankruptcy (the Trustee).
In the recent case of Loveridge v Povey and Ors [2024] EWHC 329 (Ch) a company shareholder sought to challenge the administrators’ decision to rescue a balance sheet solvent company as a going concern by securing additional funding, as opposed to pursuing a sale of the business.
Background