In the recent case of Re LYHFL Limited [2023] EWHC 2585 (Ch), the High Court has considered the proper interpretation of paragraph 12(1)(b), Schedule B1 of the Insolvency Act 1986, by which directors can apply to court for an order putting the company into administration.

Drawing on previous authorities concerning this and similar provisions, the Court concluded that an individual director has no power to make such an application without the approval of the majority of the company's directors and a valid board resolution.

Facts

As the festive season approaches, it is time to take stock of the three 2023 most important decisions of the German Federal Court of Justice (Bundesgerichtshof, BGH) on claw-back issues in insolvency.

As the nights draw in and the new year approaches, we take stock of the state of play for European restructuring and look ahead at potential trends for 2024.

Completion of legal reforms

On 30 October 2023, HM Treasury (HMT) published three documents setting out how the UK government plans to regulate cryptoassets going forward:

Singapore’s highest court has definitively held that foreign insolvency, restructuring or liquidation proceedings concerning solvent companies should be recognised in Singapore (Re Ascentra Holdings, Inc (in official liquidation) v SPGK Pte Ltd [2023] SGCA 32), overturning a first instance decision taking the contrary view.

It’s not the first occasion that a major serviced office provider has landed in a corporate restructuring but it may be the most high-profile. The current evolving situation follows on from such previous fireworks as the failed IPO, a corporate reorganisation that swapped a US headco “inc.“ for an “LLC” (prompting litigation at the end of the last decade), and continuing market uncertainty as to the robustness of the brand.

The UK Government's abandonment of the case will come as a relief to non-executive directors who feared being held to unrealistic standards

The Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, commenced disqualification proceedings against five former non-executive directors (NEDs) of Carillion plc in January 2021, following the compulsory liquidation of the Carillion Group in January 2018. Last month on the eve of trial, the IS discontinued its disqualification proceedings against the NEDs.

The Supreme Court has handed down a judgment which will be greeted with a collective sigh of relief from the insolvency world. In R (on the application of Palmer) v Northern Derbyshire Magistrates Court [2023] UKSC 38, the Supreme Court ruled that an administrator of a company is not an “officer” of that company.

The Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, commenced disqualification proceedings against five former non-executive directors (NEDs) of Carillion plc in January 2021, following the compulsory liquidation of the Carillion Group in January 2018. Last month on the eve of trial, the IS discontinued its disqualification proceedings against the NEDs.

High rates of insolvencies look set to continue as the latest quarterly insolvency statistics have been published for England and Wales. Whilst the statistics show a 2% dip from the second quarter of 2023, the number of insolvencies remains 10% higher than in 2022 and shows a return to pre-pandemic levels for compulsory liquidations and administrations. It is particularly striking that the first two quarters of 2023 represent the highest quarterly insolvencies since Q2 2009.