MPs' Report on the financial collapse of BHS: what are the key pensions implications?

MPs have published a report on the events leading to the financial collapse of BHS shortly after its sale by Sir Philip Green. As a consequence of BHS's insolvency, its defined benefit pension schemes will enter the PPF.

There is little doubt that even the most thought-out, meticulous and well-structured business rescue plan cannot succeed unless there is some degree of financial support in the form of post-commencement finance (PCF) available, to allow the business to sail through the choppy waters of financial distress.

Litigation

Lender not obliged to advise borrower about onerous term

In Finch and another v Lloyds TSB Bank Plc and others,  the High Court considered whether a lender had a duty to advise a borrower about a clause in its loan agreement making it liable for the bank's hedging break costs if the borrower chose to repay a fixed rate loan early.

In Umso Construction (Pty) Ltd v Member of the Executive Council for Roads and Public Works Eastern Cape Province and Others ((20800/2014) [2016] ZASCA 61), the Supreme Court of Appeal considered the legal position where, following the award of a tender, it is discovered that the preferred bidder had been placed under business rescue during the bid evaluation process.

In Roering & Another NNO v Mahlangu (581/2015) [2016] ZASCA 79 heard recently, the Supreme Court of Appeal (SCA) considered the circumstances that might justify a witness under subpoena applying for enquiry proceedings to be set aside or for the witness to be excused from attending those proceedings.

The general rule is that a subpoenaed witness is compelled to attend, subject to procedural requirements being met, and the evidence sought being relevant to the insolvent company or entity.

June 2016 BREXIT A changing legal landscape? 1 INTRODUCTION Yesterday, the UK public voted for the UK to leave the European Union ( EU). This briefing discusses, in outline, the potential timetable for Brexit, the possible shape that Brexit might take and the potential impact Brexit might have on certain areas of law relevant to your business.

In the recent case of Constantia Insurance Company Limited v Master of the High Court, Johannesburg (23968/2015) [2016] ZAGPJHC 121 the High Court considered whether the provisions of the Insolvency Act, No 24 of 1936 (Act) permit the Master to consider liquidators’ additional submissions in response to a creditor’s substantiation of its claim.

The Supreme Court of Appeal (SCA) in Swart v Starbuck & Others 2016 ZASCA 83, reaffirmed the necessary authorisation for a trustee of an insolvent estate to sell an insolvent estate’s immovable property.

Mr Swart’s estate was finally sequestrated on 1 November 2005. On 24 January 2006, three provisional trustees were appointed by the Master of the High Court. At the time of Mr Swart’s provisional sequestration, he owned certain immovable properties (Properties).

Facility agreements ordinarily oblige a borrower to prepay the facility on the occurrence of certain events, including, if a borrower receives insurance proceeds or asset sale proceeds during the loan term. The rationale for this is that lenders wish to use this unexpected windfall to mitigate the risk of non-payment. This is also the approach of the Loan Market Association (LMA) in its standard facility agreements.

Employment contracts were previously deemed to be suspended on the date of liquidation, being the date that the application for liquidation of the company is presented and issued at court in terms of s348 of the Companies Act, No 61 of 1973 (Old Companies Act). However, this position has since changed.