We take a look at the reforms to the EC Insolvency Regulation in light of the European Parliament’s 4 February vote on the committee of legal affairs’ report on the proposed reforms.

The background

Can a debtor be found to be balance sheet or cash flow insolvent even though its obligations are limited (in terms of creditor recourse) to the available assets? This was the question facing the High Court in Re ARM Asset Backed Securities SA [2013] EWCH 3351.

The background

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

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

The context - validity of appointment of administrators

The appointment of administrators under a charge prevents a company’s directors from exercising any management powers without the administrator’s consent.
However, the charge must be enforceable at the time of the administrators’ appointment. What happens if the directors dispute that the charge was enforceable? Are they prevented from controlling the company to reject the appointment.

The background

IPs are always on guard for potential conversion claims - but what happens when no title can be established? Euromex clarifies the whole mess.

The background

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.

Whenever there is an apparent monetary debt, common practice is for a claimant to threaten a winding up petition as part of the tactics to get a potential defendant to pay up. Three weeks after a statutory demand letter is sent where an apparent debt for £750 or more exists, a winding up petition can be issued against a company which has not paid (the actual financial wellbeing of the payer is irrelevant as long as they have not paid). Whenever an apparent debt is in dispute this can be a powerful tool to unsettle a defendant.

Following insolvency, creditors and the (now insolvent) company can claim back losses from directors who breached their duties prior to the business breaking down. But it is not just formal directors – it is any individuals who actually control the company and have made themselves ‘shadow directors’ by doing so. In this way, creditors can recoup funds to meet the company’s debts from the individual directors who caused the loss of such funds.

The High Court has confirmed that all rights relating to the control of data belonging to, or being controlled by, a company at the time it entered into liquidation remain vested in the company at and following its liquidation. Liquidators are therefore not personally liable for compliance with the Data Protection Act 1998 in respect of this data as they will be viewed as agents acting for the company rather than as 'data controllers'.