The High Court has held that a bankrupt’s unexercised rights to draw his pension did not represent income to which the bankrupt was entitled and so refused to make an income payments order, contradicting the controversial decision in Raithatha v Williamson which held that a bankrupt’s right to draw income from a personal pension may be subject to an income payments order even if the individual has yet to draw his pension.
Horton v Henry [2014] EWHC 4209 (Ch)
The High Court has rejected the argument that amounts owing to British Gas Trading Ltd (BGT) under post-administration, deemed contracts for the provision of gas and electricity are automatically classed as expenses of the administration. The court has reserved for consideration, however, whether and if so how an administrator’s conduct may give the liability super priority or bring the salvage principle into play.
Background and preliminary issue
Since the Welfare Reform and Pensions Act 1999 (“1999 Act”), it has been understood that the rights of a bankrupt under a tax approved pension plan are excluded from the bankruptcy estate and do not vest in his Trustee in Bankruptcy.
That said, where a Bankrupt was already drawing an income from his pension, his Trustee could seek an Income Payments Order over that income.
The Court of Appeal has handed down an important judgment for landlords and insolvency practitioners, in the case of Jervis v Pillar Denton; re Games Station (“Game”).
In a case of importance to foreign representatives of foreign debtors seeking the assistance of US courts pursuant to chapter 15 of the Bankruptcy Code, the US Court of Appeals for the Second Circuit has held that the debtor eligibility requirements of section 109(a) of the US Bankruptcy Code apply in cases under chapter 15 as they would in cases under other chapters of the Bankruptcy Code. The decision in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), Case No. 13-612 (2d Cir. Dec.
According to The Times (25 October 2013) the British Property Federation has advised landlords to take larger rent deposits to reduce losses caused by the insolvency of a tenant.
A new Statement of Insolvency Practice relating to pre-packaged sales in Administration has been issued and has effect from 1 November 2013.
This provides for earlier notification to creditors of the sale and the justification for it and provides a more extensive list of information that must be included.
The main changes are:
The High Court has sanctioned a scheme of arrangement between a Vietnamese company and certain of its creditors; the first time a Vietnamese company has taken advantage of this restructuring process in England.
Background
The Court of Appeal’s decision in the matters of Nortel GMBH and Lehman Brothers International (Europe) (both in administration) and other companies has been overturned by the Supreme Court. Liabilities imposed on insolvent companies by the Pensions Regulator (“tPR”) will not be treated as an expense of the insolvency, which would be payable by the office holder in advance of making payment of his own remuneration or to floating charge holders. The liability will rank as an unsecured debt rateably with all other unsecured creditors.
The Supreme Court yesterday issued its decision in the long-running case concerning financial support directions (“FSDs”) issued by the UK Pensions Regulator to various companies in the Nortel and Lehman groups. The case considered where a company's obligations under an FSD should rank in relation to its other debts if the company was insolvent when the FSD was issued.