It’s been a difficult last few years for the licensed trade and the hospitality and leisure sector generally, both in terms of recovery from the Covid-19 pandemic and, more recently, the wider economic challenges facing the industry.

The threat of insolvency looms large and with it comes various regulatory considerations for insolvency practitioners (IPs): firstly, liquor licensing considerations that might arise post-appointment and, secondly, broader health and safety issues that can shift into sharp focus.

Premises licences

If a transaction by a company amounts to an "unlawful distribution", and the company subsequently goes into liquidation, will an action for recovery of the benefits of that distribution, brought against the directors who authorised the transaction, be statute-barred if it is commenced by the liquidator of the company more than 6 years after the distribution was made?

In MB Refrigeration and Air Conditioning Ltd (In Liquidation) v Allied Irish Banks Plc [2016] IEHC 753, High Court, Barrett J, 21 December 2016, the Liquidator of the plaintiff company sought a declaration that certain transactions between 13 August 2013 and 4 October 2013 on a particular AIB account, constituted dispositions of the property of the plaintiff made after the commencement of its winding-up and thus wer

In Toomey Leasing Group Ltd v Sedgwick & Ors [2016] IECA 280, Court of Appeal, Hogan J, 13 October 2016,the first named respondent (Mr Sedgwick) appealed from a decision of the High Court that he, and the second respondent were personally liable to the applicant in the sum of €48,250 pursuant to Section 297A of the Companies Act 1963.

The decision of the Inner House of the Court of Session was released last week in the keenly awaited application by the liquidators of Scottish Coal who sought directions on whether a liquidator appointed to a Scottish company could:

We recently reported on the Court of Session's decision that a liquidator of a company being wound up in Scotland may abandon both heritable property and statutory licences. A full copy of that article can be accessed here.

The Court has now issued its written decision. This provides further analysis and confirms the position that we previously reported.

Parties represented

The Court of Session has held that a liquidator of a company being wound up in Scotland may abandon both heritable property and statutory licences. Affected creditors will have the right to submit a claim in the liquidation process. In the absence of that creditor holding security, the claim will rank as an unsecured claim.

Background

The Court of Appeal has issued further guidance on the thorny issue of the application of the TUPE Regulations to administration proceedings.  While many practitioners will feel that the decisions are not helpful in trying to achieve business sales in what is already a challenging market, insolvency practitioners (IPs) nonetheless need to be aware of the clarity that these cases have brought. The key points to note are:

OTG v Barke is the latest case from the Employment Appeal Tribunal (EAT) to consider how the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) apply in the context of the sale of a business in administration. The case largely resolves the uncertainty in that context and affirms the general practice of administrators and purchasers of businesses from them.

On 25 March 2011 the High Court delivered a judgment concluding that a notice of crystallisation served by a bank (who held fixed and floating charges) on three corporate borrowers shortly before they were placed into liquidation did not alter the order of priorities.