In the second of our mini-series on insolvency in construction, we consider what you need to do when you find out that the party you are in contract with has become (or is about to become) insolvent.

Who are you in contract with? Which specific entity?

The first thing you should do in the event of a counterparty's alleged insolvency is check which legal entity you are in a contract with.

This is in order to prevent you from acting too early and committing a repudiatory breach yourself, if you take pre-emptive action against your counterparty.

Insolvency is high on the agenda in the construction industry.

In the first of this mini series, we take a look at the meaning of insolvency and summarise the main insolvency processes that can typically affect parties involved in construction projects. The series will also address contract issues and minimising risk, so keep an eye out for our future articles on this topic.

What happens if a debtor is made bankrupt after a creditor has issued debt recovery proceedings?

A bankruptcy debt is any debt that the bankrupt owed to the relevant creditor at the date of the bankruptcy order, or a debt which arises under an obligation incurred by the debtor before the bankruptcy order, but one which falls due after the date of the bankruptcy order (known as contingent debts).

Court sets out procedure for contempt of court proceedings against bankrupt

For the first time, the Divisional Court has provided guidance on the correct procedure to be used in contempt of court cases falling under the Insolvency Act 1986 (IA).

The Insolvency Service has just released its personal insolvency statistics for 2017 revealing an upturn in overall personal insolvencies (just under 10% more than in 2016) and an increase of around 1/5th (19.8% on 2016) of people entering into Individual Insolvency Arrangements (IVAs). More people entered into IVAs last year than in 2008 (when many consider the credit crunch took its grip).

In light of the business news over the last year, including the most current news of Carillion, it is important to know how business failure impacts on employment rights.

Despite the Treasury’s comparison of independent forecasts for the UK economy showing an overall upturn for January 2018, there appears to be a nasty outbreak of bad weather looming. Close on the heels of the reported financial woes of Toys R Us and House of Fraser comes the news of the fashion retailer New Look and now, massively, Carillion.

The recent decision in Leeds v Lemos may create significant problems for Trustees in Bankruptcy as they attempt to fulfil their duty of realising a Bankrupt’s estate for the benefit of his creditors.

The case centred on the wish of the Trustee in Bankruptcy to rely on documents that the Bankrupt (and some third parties) claimed were privileged. The Trustee in Bankruptcy therefore asked the Court to compel the Bankrupt to waive privilege, so that the documents could be referred to in legal proceedings..

Registering a financing statement under the Ontario PPSA[1] to perfect a security interest is a key means of protecting a secured creditor’s priority over collateral. It is important for secured creditors to be cognizant however that there are situations where other claims that are not subject to traditional registration requirements may still trump a secured creditor’s registered security interest.

In our update this month we take a look at three cases that provide helpful clarification from the courts on issues that will be of interest to the insolvency and fraud industry - the key message from each case confirms:

Defendant's threat of insolvency did not prevent adjudicator's decision being enforced.