The English Court of Appeal has recently decided that a corporation that held shares in a company remained a shareholder notwithstanding the shareholding company's dissolution.

BWE Estates Limited had two shareholders: an individual named David who held 75% of its shares and a company, Belvedere Limited, which held the remaining 25%. Although Belvedere was dissolved in 1996, it remained listed as a shareholder in BWE's share register.

In the English High Court, the joint administrators of four English companies within the former Lehman Brothers group sought directions from the Court in respect of a proposed settlement. The settlement would put to rest substantial inter-company claims including those at issue in the 'Waterfall III' proceedings.

In a second application heard on the same day, Hildyard J considered an application by the administrators of Lehman Brothers Europe Limited (LBEL) for directions that would enable a surplus to be distributed to the sole member of LBEL while LBEL remained in administration. The proposed scheme had material benefits for both shareholders and creditors. The administrators acknowledged that the orders sought were an indirect means of circumventing the Insolvency Act 1986 (UK), which does not expressly provide for directors to make distributions during an administration.

The Court of Appeal has recently dismissed an appeal from the High Court's judgment (discussed in our September 2016 update) setting aside a compromise under Part 14 of the Companies Act 1993 after finding that the challenging creditors, who had voted against the compromise, had been unfairly prejudiced by the decision to call only one meeting of creditors.

In Day v The Official Assignee as Liquidator of GN Networks Ltd (in Liq) [2016] NZHC 2400, the High Court rejected a claim that the funding arrangement at issue constituted maintenance or champerty.

On 17 May 2011, the GC annulled a Commission decision requiring recovery of state aid from Polish steel producer Technologie Buczek (TB). The case concerned the actions taken by the Polish authorities in implementing a plan to restructure the steel industry. The GC found that the Commission had been correct to find that TB had benefited from a decision by the Polish authorities not to apply for bankruptcy but to allow the company to continue to operate without repaying its debts.

In parallel with the decision to allow the UK government to intervene in the liquidation of Bradford & Bingley, the European Commission has approved measures taken to facilitate the restructuring of Dunfermline Building Society. After the business encountered major financial difficulties, the UK Government intervened to facilitate an approved restructuring plan under which the building society’s impaired assets were split from its profitable business and put into administration.

Following concerns expressed by the Insolvency Service and reports showing that corporate insolvency costs are higher in the UK than other European countries, the Office of Fair Trading (“OFT”) has announced that it will conduct a market study into the UK corporate insolvency market. The study will also look into the process for appointing insolvency practitioners. The OFT will be contacting key players in the market directly, and other interested parties are invited to make submissions.

Market studies