Much like the English Scheme of Arrangement which has become a popular debt restructuring solution for international debtors, the English High Court is an attractive forum for insolvency litigation thanks to the potent combination of wide-ranging powers available to Insolvency Practitioners (IPs) under the Insolvency Act 1986, and the increasing availability of litigation funding arrangements in the London market.
Liability management exercises (“LMEs”) are increasing in the bond and capital market and are often used in relatively benign situations. They are certainly not always a precursor to a full-scale restructuring or insolvency.
Prior to the recent collapse in oil values, prices existed at over $100 a barrel for over three years. It made the economics of oil exploration, production and sale comparatively straightforward, but embedded costs into the industry.
Legal & Regulatory
BRRD: FCA publishes modification by consent for Article 55 rules
Second Circuit holds that Bankruptcy Code preempts creditors’ state law constructive fraud claims.
The High Court has considered whether the title to a freehold property could be re-vested in a company restored to the register of companies where the Crown had disclaimed its interest whilst the company was dissolved.
Background
This decision of the Chancery Division is a useful reminder to lenders of the Court’s power to set aside a transaction intended to defraud a creditor under s.423 of the Insolvency Act 1986.
The Facts
The Defendant, Mr Ahmed, was registered as the proprietor of two properties known as High Elm and Hilltop (the “Properties”). The Claimant advanced monies to be secured over the Properties by second legal charge. The Defendant fell into arrears and the Claimant commenced possession proceedings.
The High Court has recently considered whether directors were in breach of their duties after a company entered insolvency. Specifically, the Court considered whether it could exercise its discretion in accordance with section 212 of the Insolvency Act 1986, whereby the Court can order summary judgment against an officer of the company who has misapplied, retained or become accountable for money or property of the company, or been guilty of any misfeasance or breach of fiduciary or other duty in relation to the company.
The Claim
The change provides clarity regarding the pledges over credit rights, restoring pledges as effective and efficient security interests.
As of 1 October 2015, a number of changes have been introduced to insolvency law in the UK with more to follow on 10 October 2015 and then in April 2016. The key developments implemented in October 2015 will affect both companies and individuals.
From 1 October 2015
Personal Insolvency