This update focusses on a range of issues affecting IPs from the past two months, covering the consultation on fees announced in February, the HMRC announced changes to the VAT deregistration regime, when accountants may be required to produce documents under Sections 235 and 256 of the Insolvency Act, and a recent Court of Appeal decision on when a company may be considered to be insolvent for the purpose of Section 238 actions

Consultation on the regulation of Insolvency Practitioners and IPs’ fees

The United States Bankruptcy Court for the Eastern District of Virginia (the “Court”) issued an opinion limiting the ability of a “loan to own” secured creditor to credit bid at an auction for the sale of substantially all of the debtors’ assets.¹ The Court focused on the fact that the creditor’s conduct interfered with the sale process and was motivated by its desire to “own the Debtors’ business” rather than to have its d

The Court of Appeal in Pillar Denton Ltd & Others v (1) Jervis (2) Maddison and (3) Game Retail Ltd ([2014] EWCA Civ 180) yesterday overruled previous High Court authority, deciding that rent should be treated as an expense of the administration based on actual usage and not on when the rent falls due. What does this mean for practitioners?

The background

Landlords will be relieved that the Court of Appeal has closed a legal loophole in a test case arising out of the administration of the Game group of Companies – Pillar Denton Ltd & 5 others v (1) Jervis (2) Maddison (3) Game Retail Ltd [2014] EWCA Civ 180.

What happens to funds held in escrow when the paying entity goes into administration?

The background

Escrow mechanisms are familiar territory for most practitioners. The case of Bristol Alliance Nominee No. 1 Ltd and others v Neil Andrew Bennett and others [2013] EWCA Civ 1626 explores what happens when funds are held in escrow at a time when the paying entity goes into administration.

We take a look at the reforms to the EC Insolvency Regulation in light of the European Parliament’s 4 February vote on the committee of legal affairs’ report on the proposed reforms.

The background

Can a debtor be found to be balance sheet or cash flow insolvent even though its obligations are limited (in terms of creditor recourse) to the available assets? This was the question facing the High Court in Re ARM Asset Backed Securities SA [2013] EWCH 3351.

The background

On January 17, 2014, the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) entered an order in the Fisker Automotive (“Fisker”) chapter 11 bankruptcy cases limiting the ability of Fisker’s secured lender, Hybrid Tech Holdings, LLC (“Hybrid”), to credit bid at an auction for the sale of substantially all of Fisker’s assets.¹ Hybrid immediately sought an appeal of the Bankruptcy Court’s

The context - validity of appointment of administrators

The appointment of administrators under a charge prevents a company’s directors from exercising any management powers without the administrator’s consent.
However, the charge must be enforceable at the time of the administrators’ appointment. What happens if the directors dispute that the charge was enforceable? Are they prevented from controlling the company to reject the appointment.

The background

IPs are always on guard for potential conversion claims - but what happens when no title can be established? Euromex clarifies the whole mess.

The background