Background

The Second Claimant (“Mr Hunt”) was appointed liquidator of the First Claimant (“BHUK”) on 11 December 2012. The action against the Defendant was commenced on 15 October 2013. By this time BHUK had already completed the process of administration and liquidation and the only material asset in the liquidation was the claim against the Defendant.

The recently published Pension Schemes Bill provides for major extensions of the Pensions Regulator's powers, including the creation of new criminal offences which are very broad in scope and could potentially catch a wide range of people. Whilst the Bill is not set to become law this side of the general election, it seems likely that a future government will seek to enact the measures contained in the Bill, many of which are likely to command cross-party support. 

• The Court of Appeal has given guidance to insolvent companies about whether to commence an adjudication.
• There is an important distinction to be drawn between a company in a CVA and one in liquidation.
• Parties need to be careful when making general reservations to an adjudicator's jurisdiction.

What's it about?

Facts 

Mr Kuldip Singh Birdi was made bankrupt in March 2012, on the Petition of HMRC. Three Applicants (the “Applicants”) to these proceedings had all submitted proofs of debt as creditors in Mr Birdi’s bankruptcy. Together, their claims total £189,983.

The First Respondent in these proceedings, Mr Price, was appointed as Mr Birdi’s Trustee in Bankruptcy at a meeting of creditors held in July 2012. In January 2014, Mr Price retired from practice and was removed as Trustee and the Second Respondent, Mr Pettit was appointed in his place.

The Facts

The application relates to the estate of Jillian Mascall (the “Deceased”), which owned around 27 properties. The Deceased died on 4 December 2014 and it later became apparent the estate was insolvent.

Garcia v Marex Financial Ltd [2018] EWCA Civ 1468

The Court of Appeal has for the first time applied the rule against reflective loss to claims by creditors. The rule had in the past only been used to prevent claims by shareholders against directors, where the losses claimed by the shareholders reflected those suffered by the company.

Background

The claimant, Close Brothers Ltd (“Close”), a London based bank, sought to enforce its right to sell the defendant’s, AIS (Marine) 2 Limited (“AIS”) secured property following AIS’s default on repayment of a loan. The asset in question was a vessel and AIS mortgaged shares in the vessel to Close in order to secure a loan of €2,247,000 (the “Loan”). The purpose of the Loan was to assist AIS in purchasing the vessel, which cost €3,210,000.

Agreement

The Consultation

In March 2018, the Government published a consultation on its proposed reforms to the UK’s insolvency and corporate governance landscape. It sought views on ways to reduce the risk of company failures occurring through poor governance, whilst improving the insolvency framework to create a stronger business environment. The Government has now published its response to the consultation and we consider the key changes below.

Parent Company Director Accountability

Introduction

Background to the Case In this case, the High Court scrutinised the conduct of the administrators appointed by a secured lender, Dunbar Assets plc, over a company, Angel House Developments Limited, whose sole asset was an office block in the London Docklands. The sole shareholder of the company had accused the administrators of breaching a number of duties.