A pizza boss has been handed an eight-year director disqualification for failing to maintain adequate records to explain how a £50,000 bounceback loan was used.

A bankruptcy court gave “unnecessary and unlikely incorrect” reasoning to support its “excessively broad proposition that sales free and clear under [Bankruptcy Code (“Code”)] Section 363 override, and essentially render nugatory, the critical lessee protections against a debtor-lessor under [Code] 365(h),” said the U.S. Court of Appeals for the Fifth Circuit on Feb. 16, 2022. In re Royal Bistro, LLC, 2022 WL 499938, *1-*2 (5th Cir. Feb. 16, 2022).

R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court [2021] EWHC 3013

The case of Palmer has confirmed that an insolvency practitioner in the role of an administrator can be prosecuted (and therefore personally liable) for a failure to follow correct redundancy procedures prescribed by s194 TULRCA.

Where an individual is found to have acted in breach of s194, they may be personally liable to an unlimited fine (or a fine of up to £5,000 if the offence is committed before 12 March 2015).

The facts

Part 1 of this article considered some of the checks and balances that apply when seeking access to one of the law’s most potent weapons, including the tests the applicant must satisfy, and exceptions that are commonly included in the order made by the court (see ‘Freezing orders: policing the nuclear option (Pt 1)’, NLJ, 7 & 14 January 2022, p15).

Despite calls upon the government to intervene and, later, attempts to sell the business, the South West construction firm Midas has collapsed into administration this week.

The collapse of the business has led to over 300 redundancies, though it is understood that a section of the business (Mi-Space) has been sold, saving over 50 jobs. Concerns have also been raised about the knock-on effort on sub-contractors and connected businesses, many of whom have been left out of pocket through unfulfilled contracts and unpaid invoices.

For the second time in four weeks, a U.S. district court questioned the authority of bankruptcy courts to issue nonconsensual third-party releases as part of a plan of reorganization.

When the availability of bounceback loans was announced, it was heralded as the way for small businesses to quickly and easily access loans of between £2,000 and £50,000 during the COVID pandemic. Undoubtedly, it has helped a significant number of small businesses to weather the storm that COVID brought on many.

The judgment in the much-publicised case of Akhmedovav Akhmedov & Ors[i] in April 2021 is a telling example of where the English Courts have exercised wide-reaching statutory powers to set aside or vary dispositions on trust with extra-territorial effect, notwithstanding the assets are held by offshore trustees, outside the Court’s j

For the second time in four weeks, a U.S. District Court has questioned the authority of bankruptcy courts to issue non-consensual third-party releases as part of a plan of reorganization. On Jan. 13, 2022, the Eastern District of Virginia vacated the confirmation order in the Mahwah Bergen Retail Group, Inc. (f/k/a Ascena Retail Group, Inc.) chapter 11 cases on the grounds that the plan contained impermissible non-consensual third-party releases. Patterson, et al. v. Mahwah Bergen Retail Group, Inc., Civ. No. 3:21cv167 (DJN) (E.D. Va. Jan. 13, 2022).

Appeals from bankruptcy court orders continue to play a key role in bankruptcy practice. The relevant sections of the Judicial Code and the Federal Bankruptcy Rules arguably cover all the relevant issues in a straightforward manner. Recent cases, however, show that neither Congress nor the Rules Committees could ever address the myriad issues raised by imaginative lawyers. The appellate courts continue to wrestle with standing, jurisdiction, mootness, excusable neglect, and finality, among other things.