R (on the application of Palmer) (Appellant) v Northern Derbyshire Magistrates’ Court and another (Respondents) [2023] UKSC 38

On appeal from: [2021] EWHC 3013

Now that HMRC has become a preferential creditor for certain debts, other creditors – such as suppliers – could lose out.

Under the Finance Act 2020, from 1 December 2020, HMRC became a preferential creditor in insolvency proceedings. This may have significant impact on what’s left for other creditors.

In its October 22, 2020, CNH Diversified Opportunities Master Account, L.P. v.

The Corporate Insolvency and Governance Act (CIGA) came into force on 26 June 2020, introducing significant reforms intended to provide breathing space for companies during the coronavirus pandemic.

These measures may be a welcome relief to some struggling companies. However, they could prove problematic for suppliers, who will need to tread especially carefully when dealing with distressed or insolvent companies.

What has CIGA changed?

On January 17, 2017, in a long-awaited decision in Marblegate Asset Management, LLC v. Education Management Finance Corp.,1 the US Court of Appeals for the Second Circuit held that Section 316 of the Trust Indenture Act ("TIA") does not prohibit an out of court restructuring of corporate bonds so long as an indenture's core payment terms are left intact.

The US Court of Appeals for the Sixth Circuit has ruled that a lender’s security interest in accounts was not perfected because a reference to “proceeds” in the lender’s UCC financing statement did not expressly refer to “accounts.” The Sixth Circuit surprisingly interpreted the definition of “proceeds”1 in Article 9 of the Uniform Commercial Code to exclude “accounts”2 (despite and without reference to provisions of UCC Article 9 to the contrary).