An old friend

In a Court of Appeal decision handed down last week the court considered the interplay between the construction adjudication process on the one hand and the insolvency regime on the other.

On January 17, 2019, the United States Court of Appeals for the Fifth Circuit (the “FifthCircuit”) issued a decision in In re Ultra Petroleum Corp. that could have significant implications for creditors seeking payment of contractual make-whole amounts and post-petition interest from chapter 11 debtors.[1]

Clarification by the Court of Appeal (England and Wales) on Contracts

Case: Leibson Corporation and Others v TOC Investments Corporation and Others [2018] EWCA Civ 763 (17 April 2018).

Summary

English law restructuring and insolvency tools are used to implement financial restructurings and the external administration of foreign companies. The attractiveness of the English tools and legal system is highlighted by the prevalence of companies incorporated abroad, especially companies incorporated in the EU, which avail themselves of those tools. English law in this area is impacted by much European law.

The long awaited new Scottish Insolvency Rules for Company Voluntary Arrangements and Administration (The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018) were laid in Parliament today. The Rules are a negative SI which means they do not need active approval by Parliament and will automatically come into effect as law unless either the Commons or Lords annuls them within a fixed period after they have been laid. The intention is that they will commence on 6 April 2019.

It’s been reported that the board of directors of AIM-listed Patisserie Holdings plc, which owns the Patisserie Valerie chain of cafés, was not aware for almost a month that HMRC had filed a petition at the High Court of England and Wales to wind up its main trading subsidiary, Stonebeach Limited.

Recently, there have been a number of high profile insolvencies hitting the headlines with a number of High Street retailers entering insolvency either by proposing a company voluntary administration (“CVA”) or via another formal insolvency process. With the recent number of high profile insolvencies there has been scrutiny of directors’ duties not only by media but also at government level.

The new special administration regime for private registered providers introduced by the Housing and Planning Act 2016 was brought into force in England and Wales in July 2018. Should we be seeking to introduce an equivalent regime for Scotland?

The new English regime was developed as a reaction to the events surrounding Cosmopolitan Housing Group which suffered financial difficulties in 2012. It introduces the concept of a housing administrator and critically provides for such an administrator to have two objectives.