The recent case of F Options Ltd v Prestwood Properties Ltd concerned the setting aside of a transaction as a preference under section 239 of the Insolvency Act 1986.
A preference arises when a company's creditor is put in a better position than they would otherwise have been in the event of the company's insolvency. Transactions may be a preference whether or not the parties are connected, but where it can be shown that there is a connection within section 249 of the Insolvency Act 1986, two important advantages are gained:
The law allows any person to be treated as a director even though that person has not been formally appointed as a director. Such directors are known as de-facto directors. By contrast, a de jure director is a person who has been validly appointed as a director.
The recent case of Re Snelling House Ltd (In Liquidation) [2012] EWHC 440 (Ch) serves as a useful reminder to consider possible claims against de-facto directors who may be acting under the wrong impression that they are beyond reprehension.
The facts
The long awaited judgment in The Commissioners for her Majesty’s Revenue and Customs v. Football League Limited, on the so called “football creditors’ rule” (the “Rule”) has been given.
This article only concerns itself with the issue of whether the Rule was or was not considered void on the grounds that it was contrary to the pari passu principle and the anti-deprivation rule and not on the fairness of the Rule itself.
On April 6, 2011, the Ontario Superior Court of Justice released its decision in the priority disputes between the lessors and aviation authorities resulting from the Skyservice receivership. The Court, in interpreting and applying the decisions in Canada 3000 and Zoom, raised the bar for lessors to defeat the seizure and detention rights of the aviation authorities in Canada.
BESTrustees v Kaupthing Singer & Friedlander [2012] EWHC 629 (Ch) (High Court Chancery Division 16 March 2012)
Background
It is looking increasingly likely that 2012 will be another difficult year for the automotive sector, leading to a decline, not only in vehicle sales, but also in goods and services supplied to the sector. As a result, businesses may experience cash flow problems and increased creditor pressure to pay invoices.
We previously reported on Raithatha v Williamson (4 April 2012) where the High Court held that a bankrupt’s right to draw a pension was subject to an income payments order (“IPO”) even if the individual had yet to draw his pension. This judgment represented a significant departure from previous practice under the Welfare Reform and Pensions Act 1999 which protected future pension rights from IPOs and distinguished them from pensions in payment. It also effectively allowed a trustee in bankruptcy to compel a bankrupt to draw pension against his wishes.
The EU insolvency law has resulted in insolvent debtors shopping for a better jurisdiction in which to become bankrupt. This article examines why and how.
Why?
The EC Regulation on Insolvency Proceedings 2000 (the ECIR), came into effect in May 2002, providing a framework for the national jurisdictions to work together by recognition of each states insolvency mechanisms. However the EC Regulation does not harmonise substantive differences in insolvency law between the subscribing nations.
Yes, on the facts in the Chapter 11 proceedings involving Borders, the insolvent bookseller.
Jefferies & Company, an investment bank, was retained by Borders to pursue reorganisation strategies, including a possible sale of the company’s assets as a going concern. The bank made considerable efforts in flogging the assets, which resulted in an offer from an interested party, but an actual sale of assets did not happen. Jefferies nevertheless claimed the liquidation fee under its agreement with Borders. The company’s creditors opposed this: no sale, no success fee.
In January and February of 2012, Justice Morawetz of the Ontario Superior Court of Justice (Commercial List) released two decisions1 in which he authorized a debtor-in-possession (“DIP”) financing charge, an administration charge, and a directors and officers (“D&O”) charge ranking ahead of, among other claims, possible pension deemed trusts over the objection of the debtor companies’ unions and on notice to the members of the companies’ pension administration committees.