There have been many reported cases in the bankruptcies of Mr and Mrs Brake (the “Brakes”) including the recent case of Patley Wood Farm LLP v Kicks [2023] EWCA Civ 901 where the Court of Appeal considered an application under s303 of the Insolvency Act 1986 (the “IA 1986”) against a decision of the trustees in bankruptcy of the Brakes (the “Trustees”).

The Supreme Court’s judgment in BTI 2014 LLC v Sequana SA and ors^[1] (“Sequana”) is a key decision on the law surrounding directors’ duties.

The High Court was required to consider the Supreme Court’s Sequana judgment in Hunt v Singh (below).

What did we learn from Sequana?

In the recent case of Brake & Anor v Chedington Court Estate Limited [2023] UKSC 29, the Supreme Court has clarified the categories of persons who have standing to make a challenge to the conduct of a trustee in bankruptcy under s303 of the Insolvency Act 1986 (the “Act”). The Supreme Court confirmed that its decision will also apply to creditors and others seeking to challenge the actions of a liquidator under s168(5) of the Act. The decision will be welcomed by practitioners.

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: