The recent sale of the bulk of Connaught's failed social housing group has received a lot of positive press attention of late, due largely to the number of jobs the deal is reported to have saved.

The sale appears to have occurred within days of Connaught going into administration. While there has been no suggestion that the deal was effected as a "pre-pack", the speed with which the sale was carried out echoes the most prominent feature of true pre-pack deals.

In our e-update of 20 January 2010, we looked at a decision of the English courts from December 2009 in which it was decided that, in England, the Administrators of a tenant company are bound to account to the landlord of premises for rent due in relation to the period during which those premises are being used in connection with the administration, and that the rent is to be paid as an expense of the administration.

A group of creditors learned the hard way that there may be no excuse for a late claim. U.S. Bankruptcy Judge James Peck of the Southern District of New York recently disallowed seven proofs of claim that had been filed late in the Lehman bankruptcies. Judge Peck held that the reasons cited by the parties for the late filing did not rise to the level of “excusable neglect” and he was thus disallowing their claims. This is of particular interest as it comes out of the Southern District of New York, which has one of the largest bankruptcy dockets in the country.

The Eleventh Circuit recently affirmed the avoidance of nearly $2 million in postpetition payments made by debtor Delco Oil, Inc. (the "Debtor") to its petroleum supplier Marathon Petroleum Company, LLC ("Marathon").[1] The Eleventh Circuit held that funds received by Marathon from the Debtor constituted cash collateral that the Debtor had spent without the permission of either its secured lender, CapitalSource Finance ("CapitalSource"), or the bankruptcy court and, therefore, could be avoided under sections 549(a) and 363(c)(2) of the Bankruptcy Code.

In the current economic climate, disputes, particularly payment disputes, are rife. Consider the following scenario. You arrive at work early on Monday morning, to discover that the supplier with whom you have been having a long-running but relatively minor dispute over payment, has secured a winding up order against your company and appointment of a liquidator from the court. Or, equally distressing, a sheriff officer appears at your door with another form of court order in his hand - an interdict - stopping you from carrying out a key part of your business activities.

A commercial landlord should never assume that, if his tenant goes into administration or liquidation, he will not be able to obtain rent from the administrator or liquidator in respect of the period following appointment of the administrator or liquidator.

One of the more interesting recent appointments in which MacRoberts have been acting relates to the administration of Livingston Football Club Limited ("Livingston") where we acted for Donnie McGruther of Mazars. Donnie was interim manager and subsequently administrator of Livingston.

In a recent interesting Scottish case, HSBC Bank plc, Re an Order to wind up Kirkbride Investment Limited [2009 Scot CS CSOH 147], the Court of Session granted an application to wind up an overseas company and appoint Joint Provisional Liquidators. The company, registered in Gibraltar, was involved in property development in Scotland with the secured lending provided by the Bank.

The Facts

The Office of Fair Trading ("OFT") has announced that it will conduct a review of the corporate insolvency market in the UK. Its aim is to assess the level of competition in the UK market and ensure that the market itself is working well for consumers.

On 23 November a new form of diligence will be created which allows creditors to seize money belonging to a debtor in satisfaction of a debt.

In principle, all assets owned by a debtor should be susceptible to enforcement of a debt. But at present, creditors are unable to take diligence against cash owned by a debtor. To rectify this anomaly, a special category of diligence - money attachment - has been introduced by Part 8 of the Bankruptcy and Diligence etc. (Scotland) Act 2007.

When can a money attachment be used?