This article provides an essential update for insolvency practitioners on insolvency changes in 2015 and the proposed changes in 2016.
2015 Changes
The Small Business, Enterprise and Employment Act 2015
In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.
On 20 May 2015, the European Parliament adopted a new version (the "Revised Regulation") of Regulation 1346/2000 on insolvency proceedings (the "Original Regulation").
According to the statement of the Council's reasons, the Revised Regulation is aimed at making cross-border insolvency proceedings more effective with a view to ensuring the smooth functioning of the internal market and its resilience in economic crises.
En date du 20 mai 2015, le Parlement Européen a adopté une nouvelle mouture (le Règlement Révisé) du Règlement 1346/2000 relatif aux procédures d’insolvabilité (le Règlement Original).
Aux termes de l’exposé des motifs du Conseil, l’objectif du Règlement Révisé était de rendre les procédures d’insolvabilité transfrontières plus efficaces avec l’intention plus large d’assurer le bon fonctionnement du marché intérieur et sa résilience lors des crises économiques.
The Pension Protection Fund (PPF) has issued a guidance note on Insolvency Practitioner remuneration which will apply where the insolvent company has a Defined Benefit Pension Scheme. The guidance note applies to pre and post appointment work.
The Guidance Note can be found here.
The Supreme Court has handed down its judgment in the case of The Trustees of Olympic Airlines SA Pension and Life Assurance Scheme –v- Olympic Airlines SA. Pitmans’ Trustee company, PTL, were the Appellants.
The question at issue was what connection must a foreign company, that has its Centre of Main Interests (COMI) in another EU country, have within the United Kingdom, to entitle an English Court to wind it up.
Principle
In order to secure the protection of judicial reorganization, the debtor needs to attach to the petition for judicial reorganization a certain number of documents provided for in article 17 § 2 of the Law on the continuity of enterprises (LCE). If these documents are not attached to the petition, the LCE provides that the petition shall be deemed inadmissible.
In the recent decision of Horton v Henry [2014] EWHC 4209 (Ch) the High Court held that a Bankrupt’s unexercised rights to draw his pension did not represent income to which the Bankrupt was entitled within the meaning of section 310(7) of the Insolvency Act 1986 and so refused to make an Income Payments Order. This contradicted the controversial decision in Raithatha v Williamson [2012] EWHC 909 (Ch) and has created uncertainty as to which is the correct position. The Horton case is being appealed.
The High Court has held that a bankrupt’s unexercised rights to draw his pension did not represent income to which the bankrupt was entitled and so refused to make an income payments order, contradicting the controversial decision in Raithatha v Williamson which held that a bankrupt’s right to draw income from a personal pension may be subject to an income payments order even if the individual has yet to draw his pension.
Horton v Henry [2014] EWHC 4209 (Ch)
This article provides an essential update for insolvency practitioners on the proposed Insolvency Rules 2015 and the end of the insolvency exemption on Conditional Fee Agreements.
The end of the CFA?