The following question was published in the Financial Times on 23 July 2011 and answered by Richard Curtin, a lawyer in the London office of Faegre & Benson LLP.
I run a food and drinks company supplying products to football clubs. But we recently heard that one of the clubs we supply will probably go into liquidation very soon and we are concerned that we may not receive the money we're owed by it. Is there any action we can take now to make sure we are credited if and when the club becomes insolvent?
The Employment Appeal Tribunal (EAT) has held inPressure Coolers Ltd v Molley UKEAT/0272/10 that when a transferor under TUPE is subject to insolvency proceedings not instituted with a view to liquidating the transferor's assets, the Secretary of State will only meet employment liabilities that arise before the transfer.
On June 22, 2011, the Supreme Court decided Stern v. Marshall, No. 10-179, holding that the Bankruptcy Court had the statutory authority under 28 U.S.C. § 157(b)(2)(C) to enter judgment on a counterclaim that the bankruptcy estate of Vickie Lynn Marshall (a/k/a Anna Nicole Smith) asserted against E.
The Employment Appeal Tribunal (EAT) held in OTG Ltd v Barke (2011 UKEAT) that TUPE will apply to transfer employees when a company goes into administration, including on a pre-pack administration. This decision overturns the leading case of Oakland v Wellswood (Yorkshire) Ltd, which found that TUPE did not apply to "pre-packs".