Liquidator remuneration in insolvency proceedings often raises difficult questions; especially in large corporate collapses where the work is extensive and the stakes are high. Courts must balance fair compensation with creditor protection, but approaches to fee assessment have varied across jurisdictions, leading to uncertainty and dispute.

When a company goes into liquidation, creditors often wonder whether they will recover their debts. One available option to achieve this is funding legal action to help the liquidator recover assets.

Singapore's insolvency legislation allows creditors who fund liquidators' recovery actions to have priority over other creditors in the distribution of recovered assets. This improves the viability of commencing insolvency proceedings as an asset recovery tool.

When a company enters liquidation, the appointed liquidator steps into a pivotal role – one that requires navigating complex challenges to recover assets and maximize returns for creditors. This task entails conducting detailed investigations and pursuing legal actions, processes that demand a careful balance of inquiry, judgment, and responsibility.

In Sian Participation Corporation (In Liquidation) v Halimeda International Ltd [2024] UKPC 16, the Privy Council considered an appeal from the Court of Appeal of the Eastern Caribbean Supreme Court (BVI) as to whether a company should be wound up where the debt on which the winding up application is based is subject to an arbitration agreement and is said to be disputed and/or subject to a cross-claim.

The collapse of UK retailer British Home Stores ("BHS") in 2016 remains one of the most high-profile corporate insolvencies of recent times. It went from being a household name across the UK, with over 11,000 employees, to having reported debts of £1.3 billion, including a pension deficit of nearly £600 million. The group's demise saw the closure of some 164 stores nationwide and significant job losses.

On July 2, 2024, the Court of Appeal for British Columbia (the “Court”) released its highly anticipated decision in British Columbia v. Peakhill Capital Inc., 2024 BCCA 246 (“Peakhill”) concerning the use of reverse vesting orders (“RVOs”) to effect sale transactions structured to avoid provincial property transfer taxes for the benefit of creditors.

Seven years after the British Home Stores Group Limited, a well known high street retailer, and its operating subsidiaries entered liquidation, the High Court has found two former directors liable for wrongful trading and misfeasance.

Background

Many litigators and corporate lawyers view the practice of representing a large shareholder and the company in which it is invested as common practice. In many instances, no conflict of interest will ever materialize such that the shareholder and the company require separate representation. However, in a recent opinion rendered by the United States Bankruptcy Court, Eastern District of Virginia (the “Court”), a large international law firm (the “Firm”) was disqualified from representing Enviva Inc.

The High Court has found that a borrower's debenture granted to a lender in respect of certain internet protocol (IP) addresses was a floating charge.

In a case brought by the liquidators, the High Court found two former directors liable for wrongful trading; that is, continuing to trade when they knew or should have known that there was no reasonable prospect of avoiding insolvency (section 214 of the Insolvency Act 1986).