The FCA has published finalised guidance for insolvency practitioners (IPs) appointed (or looking to be appointed) over regulated firms.
This sets out the FCA’s expectations as to how IPs can ensure firms continue to meet their regulatory obligations both before an appointment and during the course of an insolvency process. It confirms the FCA’s view of what would constitute good practice, as well as linking in to some of the existing statutory obligations on regulated firms and/or IPs.
After a period of significant inactivity as a result of the various temporary measures introduced during the pandemic, we are now approaching an insolvency cliff edge in the UK. In this video, senior restructuring and insolvency lawyers from TLT’s Scottish, Northern Irish and English offices discuss:
Additional conditions will be imposed on administrators seeking to dispose of a company’s business or assets to a party connected to the insolvent company within 8 weeks of their appointment, for administrations beginning on or after 30 April 2021.
Summary
Affected sales will be subject to either (1) prior creditor approval or (2) prior review by an independent evaluator.
Regulations laid before Parliament yesterday seek to extend the current restrictions on the presentation of winding up petitions to 31 December 2020. However, there will inevitably come a time when these temporary restrictions are lifted.
We recently acted for the successful respondent in an appeal against a winding up petition. Arnold Ayoo of 23 Essex Street was instructed.
The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law causes of action based on novel interpretations of long-standing legal doctrines such as force majeure.
U.S. Bankruptcy Judge Dennis Montali recently ruled in the Chapter 11 case of Pacific Gas & Electric (“PG&E”) that the Federal Energy Regulatory Commission (“FERC”) has no jurisdiction to interfere with the ability of a bankrupt power utility company to reject power purchase agreements (“PPAs”).
The draft Finance Bill 2019-20 was published on 11 July 2019. It includes, amongst other provisions, changes to reinstate HMRC's status as a preferential creditor in relation to certain debts in corporate insolvencies. This will have an impact for all shareholders and creditors in corporate insolvencies where HMRC is also a creditor.
What is changing?
The Supreme Court this week resolved a long-standing open issue regarding the treatment of trademark license rights in bankruptcy proceedings. The Court ruled in favor of Mission Products, a licensee under a trademark license agreement that had been rejected in the chapter 11 case of Tempnology, the debtor-licensor, determining that the rejection constituted a breach of the agreement but did not rescind it.
Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware.
The Government will consult on new laws to give consumers greater protection on retailer insolvency, but has confirmed that consumer prepayments will not be given preferential status in insolvency.
This was announced on 27 December 2018 in the Government's Response to the Law Commission's July 2016 Report on Consumer Prepayments on Retailer Insolvency.
The Law Commission's Report
The Law Commission's Report recommended that: