In a recent ruling (NMC Health PLC (in Administration) v Ernst & Young LLP [2024] EWHC 2905 (Comm)), the High Court declined to order disclosure of witness statements and transcripts of interviews conducted by administrators during their initial investigations, citing litigation privilege.

Litigation privilege

In March 2015 the major high street retailer British Home Stores (BHS) was acquired for £1 by Retail Acquisitions Limited (RAL), a company owned by Mr Dominic Chappell. Mr Chappell became a director of the BHS entities upon completion of the purchase, together with three other individuals.

What happens to a company at the end of an administration is a question that probably only keeps insolvency anoraks up at night.

There are a limited number of potential options, with the rescue of the company as a going concern being the number one objective to which all administrators aspire. However, more often than not, an administration will end with the company entering liquidation or, where the company has no property to permit a distribution to creditors, the dissolution of the company.

While franchising has typically been a more robust business model than others, it remains susceptible to broader economic and sectoral pressures, as The Body Shop’s recent entry into administration demonstrates.

In the unfortunate event that a franchisor or franchisee becomes insolvent, disruption is inevitable. However, insolvency doesn’t necessarily spell a terminal outcome. In this article we consider some of the key considerations for both franchisors and franchisees.

Handling franchisee insolvency: the franchisor’s approach

For industry professionals in India, the Insolvency and Bankruptcy Code (IBC), 2016, has been a game-changer. The introduction of a formal framework for insolvency resolution has brought much-needed clarity and efficiency to dealing with financial distress. However, the 2019 Regulations introduced a new dimension - the ability for personal guarantors (PGs) to initiate insolvency proceedings. This has significantly impacted the role of Resolution Professionals (RPs).

The High Court has handed down an important decision confirming that an unrecognised foreign judgment can be used to form the basis of a bankruptcy petition.

In rejecting the bankrupt’s appeal, the court confirmed that a debt arising pursuant to such a judgment is capable of constituting a “debt” for the purposes of section 267 Insolvency Act 1986 (the Act), despite the fact that the underlying judgment had not been the subject of recognition proceedings in England.

Facts

In the concluding part of our exploration into the 2023 insolvency landscape, Part 5 delves into two significant cases that shape the dynamics of the Insolvency and Bankruptcy Code (IBC), offering insights into constitutional challenges and the treatment of properties acquired through auction sales.

Dilip B. Jiwrajka v. Union of India

Constitutional Validity of Sections 95 to 100 in Part III of IBC

Background:

Continuing our exploration of the evolving insolvency landscape in 2023, Part 4 examines two pivotal cases that further shape the legal framework surrounding insolvency proceedings in India.

M/S. Vistra ITCL (India) & Ors. v. Mr. Dinkar Venkatasubramanian & Anr

Secured Creditor Rights and Treatment of Pledged Shares

Continuing our exploration of the evolving insolvency landscape in 2023, Part 3 delves into two more landmark cases that further define the legal contours of insolvency proceedings in India.

M. Suresh Kumar Reddy vs. Canara Bank & Ors

Clarification on NCLT's Discretion in Admitting Section 7 Applications

We find ourselves in a year of transition, with (whisper it) the economy stabilising and an election tipped for the second half of 2024. Surely only a fool, in times such as these, would seek to anticipate what change could unfold in the legal landscape over the next 12 months. Challenge accepted! For 2024 we have dusted off our crystal ball and we set out below our (educated) guesses of what to expect for the year (or two) ahead…

Implementation of UNCITRAL model law on Enterprise Group Insolvency