The Coronavirus (Recovery and Reform) Scotland Act was passed by the Scottish Government on 28 June 2022 and enacted on 10 August 2022 (the "Act"). It makes two key changes to insolvency and diligence in Scotland.
Bankruptcy floor limit
If you have fraudulently obtained Covid-19 financial support, such as a Bounce Back Loan, you must be pretty worried by recent headlines that show company directors being disqualified, fined and jailed.
It would appear that the trend we reported in the rising numbers of Scottish corporate insolvencies is showing no let up.
The recent English High Court decision of Re Glam and Tan Ltd [2022] EWHC 855 (Ch) highlights the ways in which a director can be found liable, as well as the reasons why they may be relieved of responsibility for breaches of section 212 of the Insolvency Act 1986, which penalises delinquent directors and officers.
The legislation
Following the Coronavirus pandemic, the Scottish Government introduced two key Acts. The Coronavirus (Scotland) Act 2020 and the Coronavirus (Scotland) (No.2) Act 2020 - together, these Acts made two significant changes to personal insolvency in Scotland.
The 2020 Coronavirus (Scotland) Acts
In brief
The courts were busy in the second half of 2021 with developments in the space where insolvency law and environmental law overlap.
In Victoria, the Court of Appeal has affirmed the potential for a liquidator to be personally liable, and for there to be a prospective ground to block the disclaimer of contaminated land, where the liquidator has the benefit of a third-party indemnity for environmental exposures.1
In brief
Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.
Key takeaways
In brief
With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.
In brief
In brief
Creditors commonly find that their applications to wind up a company are suddenly deferred at the last minute by the appointment of a voluntary administrator. Now, in the early days of the small business restructuring (Part 5.3B) process, the courts are already grappling with those circumstances in the context of that new regime. At the time of writing1, only four restructuring appointments under Part 5.3B have been notified to ASIC. Two of them have been the subject of court proceedings.
The resulting decisions reveal: