The High Court has set out the principles that apply to the construction of questions in an insurer’s automated online underwriting system and the circumstances in which an insurer’s questions may lead to waiver of the right to be told about certain information. In this case, the Court considered the construction and scope of the insurer’s standard question concerning previous insolvencies, and held that the wording used waived the insurer’s right to be told about other insolvency events not caught by the question.
Background
COVID has tested the resilience of the construction industry over the past 18 months: temporary site closures; working restrictions; price increases and material shortages, to name but a few. Those challenges have brought cashflow pressures to bear. Is the next storm to be weathered that of solvency? It certainly seems ever more acute in these unprecedented times.
The Court of Appeal has overturned a decision of the High Court on whether immunity from suit, generally afforded to participants in court proceedings, extends to an examinee during an examination conducted under section 236 of the Insolvency Act 1986 ("Section 236").
Once a company is facing Administration (the most common insolvency process for a trading business – although see tip 2 below), the Administrators may look to sell the business and assets. This could be a pre-pack sale, or a regular administration sale and it may only be advertised to a select group of potential buyers or more widely in the market.
The UK Government has announced that the temporary measures which were put in place to protect businesses from insolvency during the pandemic are to be lifted and from 1 October 2021. This means that creditors will be able to seek to wind up debtors who owe them money. But, the devil is in the detail. Creditors do not have carte blanche and new conditions apply. In order to continue to promote business rescue, these conditions will remain in place from 1 October 2021 to 31 March 2022.
An individual ceased trading his Scaffolding firm in Sunderland in December 2019 and immediately began employment with a third party; despite which the enterprising former scaffolder thought it would be a good idea in May 2020 to apply for a £50,000 bounce back loan from HM Government in respect of his previous business. Unsurprisingly, the funds were not applied to the Scaffolding business (which had ceased trading) and instead were used to repay third parties.
Mr Justice Zacaroli has handed down his judgment in Hurricane Energy plc [2021] EWHC 1759 (Ch).
Summary
The Court declined to approve the cross-class cram down of Hurricane’s shareholders as part of the Part 26A restructuring plan because the available evidence did not demonstrate that the shareholders were “no worse off” as a result of the restructuring plan. On that basis the restructuring plan failed.
At the recent R3 Scotland Forum[1], experts in the hospitality and leisure sector came together with the restructuring and insolvency profession to discuss the issues the sector is facing as the country emerges from lockdown. The panel discussion which was chaired by Judith Howson, Senior Manager at French Duncan and member of the R3 Scotland Committee was led by Steven Fyfe, head of the Scotland Hotels Divisions within Savills.
Hungary has passed an Act that implements EU Directive 2019/1023 on preventive restructuring frameworks, the discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt (amending EU Directive 2017/1132). This new Act was published in Hungary's Official Gazette on 3 June 2021 and will come into force on 1 July 2022.
The Court (Mr Justice Miles) has refused to sanction a scheme of arrangement (the “Scheme”) between ALL Scheme Limited (the “Company”) and its creditors. The Company is an entity within the Amigo group of companies (the “Group”).