The recent case of F Options Ltd v Prestwood Properties Ltd concerned the setting aside of a transaction as a preference under section 239 of the Insolvency Act 1986.

A preference arises when a company's creditor is put in a better position than they would otherwise have been in the event of the company's insolvency. Transactions may be a preference whether or not the parties are connected, but where it can be shown that there is a connection within section 249 of the Insolvency Act 1986, two important advantages are gained:

The law allows any person to be treated as a director even though that person has not been formally appointed as a director. Such directors are known as de-facto directors. By contrast, a de jure director is a person who has been validly appointed as a director.

The recent case of Re Snelling House Ltd (In Liquidation) [2012] EWHC 440 (Ch) serves as a useful reminder to consider possible claims against de-facto directors who may be acting under the wrong impression that they are beyond reprehension.

The facts

The long awaited judgment in The Commissioners for her Majesty’s Revenue and Customs v. Football League Limited, on the so called “football creditors’ rule” (the “Rule”) has been given.

This article only concerns itself with the issue of whether the Rule was or was not considered void on the grounds that it was contrary to the pari passu principle and the anti-deprivation rule and not on the fairness of the Rule itself.

Today, the Supreme Court of the United States issued its much awaited decision in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. ______ (2012). The noteworthy decision resolves any uncertainty surrounding a secured creditor’s right to credit bid in a sale under a chapter 11 plan which arose after cases like Philadelphia Newspapers 599 F.3d 298 (3d Cir. 2010) curtailed the right.

BESTrustees v Kaupthing Singer & Friedlander [2012] EWHC 629 (Ch) (High Court Chancery Division 16 March 2012)

Background

TOUSA involved one of the largest fraudulent transfer litigations in bankruptcy history.  The Bankruptcy Court agreed with the Unsecured Creditors’ Committee that both the so-called “New Lenders” and the “Transeastern Lenders” received fraudulent transfers as part of a July 31, 2007 financing transaction.  The District Court reversed in a scathing opinion, but today the 11th Circuit Court of Appeals has reversed the District Court and reinstated the Bankruptcy Court’s opinion in its entirety.  The opinion can be found

It is looking increasingly likely that 2012 will be another difficult year for the automotive sector, leading to a decline, not only in vehicle sales, but also in goods and services supplied to the sector. As a result, businesses may experience cash flow problems and increased creditor pressure to pay invoices.

We previously reported on Raithatha v Williamson (4 April 2012) where the High Court held that a bankrupt’s right to draw a pension was subject to an income payments order (“IPO”) even if the individual had yet to draw his pension. This judgment represented a significant departure from previous practice under the Welfare Reform and Pensions Act 1999 which protected future pension rights from IPOs and distinguished them from pensions in payment. It also effectively allowed a trustee in bankruptcy to compel a bankrupt to draw pension against his wishes.

The EU insolvency law has resulted in insolvent debtors shopping for a better jurisdiction in which to become bankrupt.  This article examines why and how.

Why?

The EC Regulation on Insolvency Proceedings 2000 (the ECIR), came into effect in May 2002, providing a framework for the national jurisdictions to work together by recognition of each states insolvency mechanisms.  However the EC Regulation does not harmonise substantive differences in insolvency law between the subscribing nations.

On March 13, 2012 the Queen of Hearts in the Fifth Circuit Court of Appeals showed no sympathy for the White Rabbit’s plight and denied a creditor’s appeal of an order disallowing its late filed proof of claim in the DHL Master Land Holding LLC bankruptcy case.¹