From 6 April 2014 Industrial and Provident Societies (IPSs) will be able to enter administration or make a voluntary arrangement with creditors. Formerly winding up was the only option for an insolvent IPS. 

This is a significant development as it extends the corporate rescue culture to these societies, which would otherwise face closure in times of financial distress. 

What is an Industrial and Provident Society? 

On 24 February 2014 the Court of Appeal delivered its long awaited judgment in the GAME Group litigation (Pillar Denton Limited & Ors -v- Jervis & Ors). 

This is an extremely important decision and will affect every trading administration where the company is a tenant. 

A former director of Custom House Capital Limited (CHC) was recently found by the High Court to have fraudulently misrepresented to an investor that her €145,000 investment in the company was “safe” a year before CHC's collapse.

In March 2010 Ms Tressan Scott entered into a Subordinated Loan Agreement with CHC pursuant to which she loaned the sum of €145,000 to CHC. At the time the agreement was signed, Ms Scott was recovering from treatment for Lymphoma.

On 22 January 2014 the High Court ordered the winding up of a property company, Fuerta Limited, on the unusual ground that it was just and equitable to do so. Resort to this ground for winding up is usually reserved for the most intractable of situations and it is thought to be the first time the Court has done so on foot of a creditor petition.  

On 24 December 2013 the Companies (Miscellaneous Provisions) Act 2013 was signed into law by the President.  The purpose of the legislation is to expedite a number of amendments to existing legislation pending the enactment of the Companies Bill.

Circuit Court Examinership

The Court of Appeal decided yesterday that it couldn’t make a ruling on the correct way to calculate the collective redundancies threshold without making a reference to the European Court of Justice. Employers will therefore have to wait a considerable while longer before the law is clarified.

124 members of the Element Six pension scheme are suing the trustees of the scheme in the Commercial Court for alleged breach of duty arising out of the decision to close the scheme with a significant deficit.  The members claim that the trustees breached their duty to the members by failing to demand that the employer fully fund the deficit in the scheme before wind up.  A number of general issues relating to the obligations of trustees were raised during the 3-week hearing of the case.

Background

Not many people shed a tear for the players when a football club goes into administration. Instead the press always quote how much money the St John’s Ambulance Service loses. The realities are in any football insolvency the creditors (including the players) lose out and the players involved are usually at the lower level clubs. 

Not many people shed a tear for the players when a club goes into administration. But the realities are that the creditors lose out and that the players involved in the majority of cases are at the lower level clubs. Out of the 60+ club insolvencies we have been involved in, only one was in the Premier League.

Footballers’ salaries differ wildly. The PFA published a league table in The Mail on Sunday recently stating average weekly earnings for players were as follows:

Borrowers are increasingly seeking to challenge or frustrate the validity of an appointment of a receiver on technical grounds. While each case will be determined on its own merits and facts, a recent decision of the High Court is illustrative of the Court’s attitude towards some such arguments.