Long awaited insolvency reforms in the UK, plus the government’s COVID-19 proposals on the use of statutory demands – and much more

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Following the judgments in recent years on attribution to a company of its directors' knowledge in Bilta (UK) Ltd (In Liquidation) v Nazir [2015] UKSC 23 and UBS AG (London Branch) and another v Kommunale Wasserwerke Leipzig [2017] EWCA Civ 1567, the UK Supreme Court has once more returned to this issue in Singularis Holdings Ltd (in Official Liquidation) (a Company Incorporated in The Cayman Islands) v Daiwa Capital Markets Europe Ltd [2019] UKSC 50, in a case where a bank (Daiwa) was held liable for breaching its Quincecare duty of care to its customer,

English courts recognise that shareholders hold a separate legal personality from the body corporate they own a stake in and will only go behind the corporate veil in limited circumstances. In the recent case of Onur Air Taşimacilik AŞ v Goldtrail Travel Ltd (In Liquidation) 1 , the Court of Appeal considered whether the financial means of the appellant’s wealthy controlling shareholder could be taken into account when making an order that the appellant had to make a substantial payment into court as a condition of being able to pursue its appeal.

Summary

The UK High Court today took a crucial step towards resolving the difficult issue of when administrators must pay rent.

After nearly two years of discussion and consultation, the UK Government has today announced that it will not be seeking to introduce new legislative controls on pre-packs, including a proposed three day notice or "cooling off" period.

The term “pre-pack” typically refers to a sale of all or part of a company’s business which is negotiated prior to the company going into administration and then completed by the administrator shortly after his appointment.

Last week the High Court of England and Wales revoked a company voluntary arrangement (CVA) promoted by retailer Miss Sixty in a damning judgment that called into question the conduct of the practitioners involved. The case of Mourant & Co Trustees Limited v Sixty UK Limited (in administration) [2010] could end so-called guarantee stripping – where the CVA purports to discharge guarantees given by a third party – and provide powerful ammunition to landlords seeking to negotiate future CVAs with tenant companies.

His Honour Judge Purle QC in Re Cornercare Limited [2010] EWHC 393 (CH) has clarified English law on the filing of successive notices of intention to appoint administrators. He has held that there is nothing in the relevant provisions of the Insolvency Act 1986 ("IA 1986") to prevent the filing of successive notices of intention to appoint administrators, where the original notice of intention to appoint an administrator had not been acted upon for good reason.