Tough trading conditions

Litigation

A referral to the financial list!

In GSO Credit v Barclays Bank plc, the Commercial Court has given guidance on the interpretation of terms in, but not directly defined by, standard Loan Market Association (LMA) documentation which was used in the context of secondary trading of a commitment under a surety bonds facility.

Where a company brings a claim against its directors for losses caused by their wrongdoing, the Supreme Court has confirmed the established position that directors cannot escape the claim by arguing that their actions are attributed to the company itself on the basis that the directors were acting as the agents of the company. 

A couple of myths dispelled…..

”It’s the company’s problem, not mine.”

Wrong: It’s a surprisingly common misconception that because your business is contained in a limited company, its demise will not affect you. This is simply not correct.

“I work for the shareholders, not the creditors”

One of a business’s greatest concerns with data storage and backup is security, that is, how can you make sure your data is safe both internally and externally if using cloud solutions? Many businesses do not use cloud based solutions because of the perceived security risks. 

Following a case known as Goldacre, it was held that if an administrator is in occupation of a leasehold property, which is being retained for the purposes of the administration, and rent falls due (monthly or quarterly) during his / her occupation, then such rent is to be treated as an expense of the administration (and therefore paid in priority to unsecured creditors). This remains the case even if the administrator occupies only part of the property and whether or not he / she occupies the property for the whole quarter.

Key2Law (Surrey) LLP v De'Antiquis [2011] EWCA Civ 1567

In this case the Court of Appeal held that, as a general rule, administration does not fall within regulation 8(7) of TUPE 2006 (which disapplies the automatic transfer principle meaning that employees do not transfer) and instead falls within regulation 8(6) of TUPE 2006 (which is much narrower in scope and only protects a transferee against the transfer of certain liabilities to employees).

Building services and maintenance contractor Rok was placed into administration in early November. Administrators from PWC are looking for a buyer for the self styled “nation’s local builder”. The move comes just weeks after the administration of its rival Connaught which led to 1,400 redundancies. Rok’s 3,800 employees will be understandably very concerned as will Rok’s customers/employers, many of whom are in the public sector.

What follows are some of the issues that need to be considered when a contractor, like Rok, goes into administration.

Building services and maintenance contractor Rok was placed into administration this week. Administrators from PWC are looking for a buyer for the self styled “nation’s local builder”. The move comes just weeks after the administration of its rival Connaught which led to 1,400 redundancies. Rok’s 3,800 employees will be understandably very concerned as will Rok’s customers/employers, many of whom are in the public sector.

In the recent judgment of Gray and others v G-T-P Group Limited, the High Court considered whether a charge fell within the scope of the Financial Collateral (No.2) Regulations 2003 (“the Regulations”) and would not therefore be void against a liquidator, despite not being registered with the Registrar of Companies.