Overview

If you walk along the seafront in the Lancashire town of Morecambe, you will come across a statue of the late Eric Morecambe. Many of us will remember Eric as half of one of the most famous comic double acts in the United Kingdom. Morecambe and Wise made us laugh, not so much through innuendo but more through the perfect timing of their various on screen exchanges. So important was timing to Eric Morecambe that one of the quotes at the foot of his statue is the phrase "In life, everything is timing".

Overview

It is not uncommon for contractors, in several industry sectors, to contract with a special purpose vehicle (SPV), whose day-to-day management is effectively controlled by a parent company, and the SPV has with little to no assets beyond cash flow provided by its parent. In this article we look at what a claimant could do outside of the traditional insolvency process in circumstances where the SPV goes into a form of external administration such as administration or liquidation and there are no assets available to the external administrators.

Background

The defining feature of the restructuring plan, which was introduced by the Corporate Insolvency and Governance Act 2020, is the "cross class cram down" ("CCCD") mechanism it introduces as a means of imposing a settlement on recalcitrant creditors.

Overview

Judgment was handed down on 30 September sanctioning the much-trailed restructuring plans for the Cineworld UK group of companies. The sanctioning of the Plans was widely expected, but drama came at the eleventh hour as a result of two last minute challenges brought by UK Commercial Property Finance Holdings ("UKCP") and the Crown Estate (both landlords of Cineworld leases). UKCP and the Crown Estate sought injunctions - not to challenge the Plans in themselves - but to order the removal of their leases from the Plans. 

Judges of Barcelona unify principles on certain points of insolvency law

International case law

European jurisprudence on universal and territorial procedures

Judgment of the Court of Justice of the European Union of April 18, 2024 (AIR BERLIN case)

In the recent decision of Re PBS Building (Qld) Pty Ltd [2024] QSC 108, the Supreme Court of Queensland considered for the first time the operation of the State’s new project and retention trust account regime in the context of an insolvency. The decision provides useful guidance to insolvency practitioners and subcontractors as to their rights in relation to trust accounts established by an insolvent head contractor.

On 9 February, the High Court handed down its judgement on Re Link Fund Solutions Ltd [2024] EWHC 250 (Ch) (the "Link Case").

It is a cornerstone of English insolvency law and practice that creditors of a company in financial difficulty should share rateably (“pari passu”) in that company's assets. Put at its simplest, creditors with security should be paid before creditors with no security and unsecured creditors should share rateably between each other. Where an unconnected and unsecured creditor is paid before another creditor in the same category, that payment risks being set aside as a "preference", should the company subsequently enter liquidation or administration. But when does a preference occur?