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
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:
On 17 May 2011, the GC annulled a Commission decision requiring recovery of state aid from Polish steel producer Technologie Buczek (TB). The case concerned the actions taken by the Polish authorities in implementing a plan to restructure the steel industry. The GC found that the Commission had been correct to find that TB had benefited from a decision by the Polish authorities not to apply for bankruptcy but to allow the company to continue to operate without repaying its debts.
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.
In previous issues of TransAtlantic, we reported that the UK Pensions Regulator had issued contribution notices (CNs) and financial support directions (FSDs) against insolvent companies in the Nortel and Lehman Brothers groups. Click here for the June story on Nortel (see page 5); click here for the November story on Lehman (see page 7).
Introduction
Against the backdrop of the recent sheriff court decisions regarding the need to appoint a Court Reporter even in cases where the assets are insufficient to meet the IPs' fees, the Court of Session has taken an innovative approach to approving IP fees without the need to appoint a court reporter.
Background