The Court of Appeal has recently considered two appeals in which the interplay between the construction adjudication process and the insolvency regime was considered; Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited (see my blog of 28 September 2018 on the TCC decision) and Cannon Corporate Limited v Primus Build Limited.

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The Weinstein Company Holdings bankruptcy decisions clarify a buyer’s ongoing obligations under contracts purchased in bankruptcy, subject to resolution of appeals.

Executive Summary

[2019] EWCA Civ 27

The Cannon case was heard at the same time as the Bresco appeal, although if searching for it, the case will be found under the Bresco name and reference. Here, there was a lengthy procedural history culminating in Cannon resisting summary judgment of an adjudication decision on the basis that Primus might not be able to repay the sums, because Primus was in a CVA. The Judge at first instance said:

[2019] EWCA Civ 27

Via libera definitivo del Consiglio dei Ministri al decreto legislativo attuativo della riforma organica del diritto della crisi d’impresa e dell’insolvenza.

Fifth Circuit finds that make-whole premiums should be considered unmatured interest subject to disallowance under Section 502(b)(2) of the Bankruptcy Code to the extent designed to compensate for future interest payments.

Overview

German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.

In August 2018, in Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation) 1 Mr Justice Fraser had the opportunity in the context of CPR Part 8 proceedings to clarify whether or not a liquidator can pursue a claim in adjudication arising out of a construction contract.

Every now and again our clients find themselves faced with a claim, or the threat of a claim, arising out of a construction contract where the party claiming money is in liquidation. In these circumstances it can be difficult to explain that a party in liquidation has no right to adjudicate a claim given that the right to adjudicate a dispute under a construction contract arises, according to the Construction Act, “at any time”. Hopefully any uncertainty surrounding this issue has now been finally resolved.