Our government has a longstanding commitment to cutting red tape. One of the ways of doing this it seems is to propose an Act of Parliament running to 153 pages. Thus we are presented with the Deregulation Bill.
A few of the provisions of this Bill relate to insolvency. The most significant are:
Project Bank Accounts (PBA) are a payment mechanism based on ring-fenced bank accounts created to increase the security of contractors and sub-contractors in a building project. Their main benefits include security and speed of payment and protection of funds in potential insolvency. Sounds too good to be true? PBAs are becoming increasingly common, and with the Government commitment to use PBAs “unless there are compelling reasons not to do so”, their joint value in public sector contracts is expected to reach £4bn by this year.
Appeal Judges in the Court of Session yesterday issued a decision directing that the liquidators of Scottish Coal Company (SCC) cannot abandon sites or disclaim statutory licences imposing obligations on the company.
The Court of Session has reiterated that balancing of accounts in bankruptcy may be relied upon by a defender in enforcement proceedings to successfully resist enforcement of an adjudicator's award. See Richard Heis & others as joint administrators of Connaught Partnerships Ltd (in administration) v. Perth & Kinross Council.
A recent overruling by the Supreme Court has revoked the priority status of pension schemes issued with a Financial Support Direction (FSD) or Contribution Notice (CN) by the Pensions Regulator, following an insolvency event. Whilst the decision largely affects companies operating within England and Wales, Scottish Courts are expected to be guided by the ruling.
The 2011 decision
OSCR report issued following investigation of benefits to employee on wind-up
Lazari GP Ltd v Jervis
When a company goes into administration, it benefits from a "moratorium" that prevents creditors taking legal and other proceedings against the company or its assets. The main purpose of the moratorium is to free an administrator's rescue attempts from the distractions of legal action from creditors.
In turbulent and uncertain financial times, employers and employees more often than ever find themselves immersed in and affected by insolvency proceedings. Particularly for employees, there is often misunderstanding and misinformation respecting the nature of the proceedings and employees’ rights thereunder. In this article, after a brief description of the most common forms of insolvency proceedings in Canada, the rights and entitlements of employees under these proceedings will be discussed.
Bankruptcy
On 5 October 2011, the NSW Supreme Court upheld an application pursuant to s 440D(1) of the Corporations Act 2001 (Cth) (the Corporations Act) for leave to bring and continue proceedings against a defendant under voluntary administration.