The economic picture has started to improve, with modest GDP growth in the first half of 2024. However, the enormous strains on business finances over the past four years have caused insolvency rates to rise sharply this year.
According to The Insolvency Service’s latest figures, company insolvencies in June 2024 were the third highest since monthly records started in 2020. Administrations in June 2024 were 22% higher than in June 2023, and the number of CVAs was 64% higher in June 2024 than June 2023.
Case law relating to the potential recharacterisation of fixed charges tends not to come around too often, but the recent case of Re UKCloud Ltd follows (relatively) hot on the heels of the Avanti Communications case, discussed here.
The case background
It is being reported that the Latvian State Security Service (the VDD) has discontinued a criminal investigation started in November 2023 into the sale of a helicopter by a company indirectly co-owned by the designated person Petr Aven .
More than 75% of the U.S. population lives in states that have legalized cannabis for adult and/or medical use.
Pursuant to a 2022 directive from President Joe Biden, a 2023 recommendation of the U.S. Department of Health and Human Services, and a scientific review released in January supporting the HHS's recommendation, the U.S. Drug Enforcement Administration is now evaluating whether to reclassify cannabis as a Schedule III drug.
Following our article on statutory demands (“SD”), if a company has received a SD and has failed to raise a legitimate dispute or make payment, then the creditor can proceed with a winding up petition. Winding up petitions play a crucial role in the legal landscape, particularly in the context of debt recovery and business insolvency.
A statutory demand (“SD”) is a formal written request for payment of a debt, typically issued by a creditor to a debtor. This legal document serves as a precursor to more severe actions, such as winding up proceedings or bankruptcy. Understanding the key aspects of a SD is crucial for both creditors seeking repayment and debtors facing potential legal consequences.
1. Purpose and legal basis
The past few weeks have brought more news stories of doom and gloom from the hospitality sector with statistics showing that the number of insolvencies is at an all-time high. Data published by UHY Hacker Young shows the number of pub and bar insolvencies increased from 438 to 725 over the last year. Insolvency specialist Begbies Traynor has recently reported that higher interest rates are pushing an increasing number of companies into insolvency.
In its much-anticipated 2023 Autumn Statement, the UK Government has committed to extending the relief available to the hospitality, retail and leisure sector. It has also announced that a business rates support package worth £4.3 billion will be available to support small businesses and the high street. However, the hospitality sector remains one of the most vulnerable, and it remains to be seen whether this additional support will be enough.
In contrast with a majority of bankruptcy courts that routinely dismiss cannabis-related cases for perceived violations of the Controlled Substances Act (CSA), the U.S. Bankruptcy Court for the Central District of California in the recent opinionIn re Hacienda, No. 2:22-BK-15163-NB, (Bankr. C.D. Cal. July 11, 2023), refused to conform to the same historical standard. Instead, the Bankruptcy Court struck down the U.S. trustee’s motion to dismiss not once but twice in favor of confirming a marijuana business’ Chapter 11 plan of reorganization.
Background
Sam Bankman-Fried is scheduled to be tried on eight charges starting on 3 October 2023, and US District Judge Lewis Kaplan has allowed for a second trial on 11 March 2024 on a further five charges that include bribing Chinese officials and committing financial fraud. The charges centre around the alleged fraud and conspiracy to defraud crypto investors and customers in FTX and Alameda Research.