Regular readers of my blogs over the years will know that I never pass up a chance to use a musical analogy for business problems. As an insolvency lawyer with a second calling treading the boards, my legal practice and my music frequently vie for my attention: never more so than during the Christmas season.

I am often asked “what do you do”? If I reply “a regulatory solicitor”, this inevitably elicits a blank expression from the enquirer (be that a non-lawyer or lawyer), so I go on to the more long-winded version, that I am a criminal solicitor who advises business owners and other stakeholders on how to stay on the right side of the criminal law, and defends them when they get it wrong.

It was far from a secret that a veritable smorgasbord of phased changes to insolvency law were coming in on 1 October. The legal and insolvency press has been riddled with it, and frankly the flavours were all a bit predictable. The commentators falling over themselves to ask mundane questions such as “are you ready for…?” and “what will happen now…?” are really just asking “we are really up to date on the new law, aren’t we brilliant?”; of course you are, but you’re not getting any marks for originality.

The High Court recently determined the extent to which a secured creditor must comply strictly with the formalities set out in a security instrument when executing a Deed of Appointment of a receiver. The Court ruled that strict compliance is required and that, in this case, this had not occurred.

Background

The news in January of this year that the government planned to increase the bankruptcy petition threshold to £5,000 (subject to parliamentary scrutiny) from 1 October was greeted with mixed reaction. On the one hand, it was welcomed in that the threshold of £750 which had been in place since 1986 was wildly out of date.

Over the past 15 years or so, one of the most commonly recurring themes in my practice has been advising both insolvency practitioners and directors on the prospects of legal proceedings being pursued for breach of director duties and/or wrongful trading. Very often the two claims are put together for the purposes of an actual or threatened claim, and very often sitting behind the scenes as well is a possible investigation and/or claim that one or more directors should be disqualified.

In the Matter of J.D. Brian Limited (In Liquidation) t/a East Coast Print and Publicity, In the Matter of J.D. Brian Motors Limited (In Liquidation) t/a Belgard Motors, In the Matter of East Coast Car Parts Limited (In Liquidation) and in the Matter of the Companies Acts 1963 - 2009

The Supreme Court has recently confirmed that a debtor can be adjudicated a bankrupt in Ireland and be subject to the Irish bankruptcy regime notwithstanding that the debtor has already been adjudicated a bankrupt in another jurisdiction, in this case the US.

Background

On 20 May 2015 the European Parliament adopted a recast of the European Insolvency Regulation. The Recast Regulation is in line with the EU’s current political priorities of promoting economic recovery and boosting growth and employment. The key objectives of the Recast Regulation are to move away from the traditional liquidation approach towards more of a “second chance approach” for businesses and entrepreneurs in financial difficulties, and to enhance cooperation and coordination in cross-border insolvency proceedings. 

Scope

The High Court has found two former directors of a car dealership in Dublin, Appleyard Motors Limited (In Liquidation) (Appleyard), personally liable to a former customer who paid for but did not receive three vehicles in the weeks leading up to the company’s liquidation. This case is particularly noteworthy as it is only the second time a director has been held personally liable for a company’s debts for reckless trading.