Why calculating potential claims under s214 Insolvency Act 1986 can be far from simple

Introduction

Duties and Implications of financial Information in s.214 claims

Introduction

This article follows Part 1 in which I set out the key issues we have recently seen and the case law arising in Misfeasance and Wrongful Trading claims. This Part 2 considers the duties and implications surrounding the financial information that is available to directors when faced with a s.214 wrongful trading claim.

This article is a part one of two series that explores the key issues we have recently seen and the case law arising in Misfeasance and Wrongful Trading claims.

Introduction

What is Wrongful Trading?

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

The Monthly Insolvency Statistics for November 2020 were released by the government on 15 December 2020 which saw an increase in corporate insolvencies up by 4% to 889, compared to October’s figure of 862 and a fall in personal insolvencies down by 22% with 9,319 compared to October’s figure of 11,945.