On 10 October, the Dubai Court of First Instance issued a potentially ground-breaking judgment in respect of directors’ liability in the context of corporate insolvency.
In particular, in the matter of the liquidation of the public company Marka PJSC (“Marka”), the Court held the company’s board of directors and managers personally and jointly liable for the company’s outstanding debts, totalling close to AED 450 million.
The Court of Appeal in England has confirmed that a Trustee in Bankruptcy (“TIB”) cannot force a bankrupt person to elect to take their uncrystallised pension benefits solely so that the TIB can recover the benefit as income for the member's creditors. The decision in Horton v Henry (2016) clarifies the legal position after previous conflicting judgements had been given by the Courts.
The powers available to HMRC to request information or documents from a third party (a Third Party Notice) where it is reasonably required by HMRC for checking the tax position of a taxpayer are generally well known. What is not so well known is the limited opportunities available to a third party who might wish to challenge the terms or scope of a Third Party Notice.
In the recent English case of Pick v Chief Land Registrar [2011] EWHC 206(Ch), the High Court held that a buyer was entitled to be registered at the Land Registry as the registered proprietor of a property sold by a bankrupt. This was the case, even though the buyer allowed the priority period in which to effect registration to lapse, and the entry of a bankruptcy restriction was made on the title after the date of the transfer, but before the application for registration.
As part of what appears to be a global trend, the amount of litigation in Belgium is increasing rapidly. Litigation advice is fast becoming one of the most in-demand services in legal practice, along with advice on restructuring and employment. Due to the challenging economic and financial conditions, companies are now tending to commence debt collection proceedings as soon as their debtors fail to honour their debts, and are pre-emptively restructuring their businesses in order to avoid unnecessary costs which might eventually lead to bankruptcy.
Due to the economic downturn there has been a rapid growth in debt claims and bankruptcy cases in the Finnish courts. Compared to 2008, almost 40% more bankruptcy proceedings and twice as many debt claims have been started this year.
Background
The law in relation to landlord's hypothec underwent significant changes on 1 April 2008 when the Bankruptcy and Diligence (Scotland) Act 2007 abolished sequestration for rent and instead provided that the hypothec was to rank as a security in an insolvency procedure.
Since 1 April 2008 certain issues have arisen out of ambiguities in the legislation. These issues have become apparent particularly in administrations. This note looks at:
Tax treatment in the hands of the creditor
The waiver of debt results in the accounting ‘loss’ of a receivable. Such loss, however, is not automatically tax deductible in the hands of the creditor.
The deductibility of such loss may be prohibited, either because it is deemed not to be incurred to retain or increase taxable income (‘general deduction criterion’), or because it is deemed to be an ‘abnormal or benevolent advantage’ granted to the debtor (‘anti-abuse rule’).
Tax treatment in the hands of the creditor
Polish tax regulations provide three major methods for obtaining a tax deduction for irrecoverable debt: waiver or forgiveness of debt, debt write-off and revaluation write-off.
Tax treatment in the hands of the creditor
The tax treatment of the forgiveness of debt within a group of companies depends on whether or not such forgiveness is of a “normal nature”. In order to be considered as being of a normal nature, the ‘advantage’ granted by a parent/creditor to its subsidiary/debtor must involve valid business reasons.