The High Court (Court) has found that it was not appropriate to make a winding up order in respect of a company under section 760(2) of the Companies Act 2014 (Act), where no party was nominated or consented to act as liquidator.

A recent Court of Appeal decision held that receivers are statutorily obliged to discharge preferential costs from assets available after deducting costs and expenses of a receiverirst line

The issue

Looking at the most recent figures on corporate insolvencies makes for worrying reading for landlords and occupiers alike, with overall numbers now exceeding pre-pandemic levels. Overall, corporate insolvencies increased by 17% in England and Wales since February 2022 and were a third higher than in February 2020.

A large number of UK companies are in significant financial distress at the moment.

Concern amongst sports aficionados around the financial integrity of the sports industry was raised in late 2022 when rugby union was the latest sport to be dragged into the insolvency conversation. Both Wasps RFC (Wasps) and Worcester RFC (Worcester, and together with Wasps, the Clubs), who can each trace their history back to the mid-19th century, appointed administrators after facing financial difficulties they attributed to the Covid-19 pandemic and resulting lockdowns.

The Irish High Court (Court) has pierced the corporate veil in Powers -v- Greymountain Management Ltd [In Liquidation] & Ors [2022] IEHC 599, to hold passive resident directors and non-resident shadow directors personally liable for funds lost to investors as a result of fraud.

The Facts

The High Court (Court) has appointed an inspector to investigate the affairs of a company following the first recorded application by a creditor, under Section 747 of the Companies Act 2014 (Act).

The Facts

The applicant, a creditor of WFS Forestry Ireland Limited (Company), and at least seventeen others, claimed that investments they made in the Company, in the form of loans and other advances, were not repaid when due.

Setting aside a transaction on the basis that it was an extortionate credit transaction under the Insolvency Act 1986 (IA 1986 or the “Act”) is difficult. A bargain may be hard or even unreasonable, but that does not make it extortionate. The most important term to any credit transaction is usually the interest rate and that is most likely to be subject to scrutiny when considering whether or not a credit transaction contained grossly exorbitant terms.

In a recent decision, the Court of Appeal upheld a High Court finding, which granted a declaration under section 819 of the Companies Act 2014 (CA 2014), restricting the appellant director (Appellant) from acting as a director or secretary of a company for a period of five years, unless the company meets the requirements set out in subsection (3) of section 819.

Under Irish and UK law, company directors owe fiduciary duties to act in good faith in the interests of the company. The company's interests in this context usually means the collective best interests of the members. However, UK and Irish authorities have developed directors' common law duties, such that in cases of insolvency, directors have a duty to consider the interests of the company's creditors.