When considering whether or not to bring a legal action, it is important to establish if it is competent and commercially worthwhile to do so. The ability to bring, or continue with, legal proceedings against a company can be restricted if that company enters into a formal insolvency process. The position of creditors may be improved now that the Third Party (Rights Against Insurers) Act 2010 has at last been brought into force.
Bankruptcy made clearer: One of the bastions of old-style Scots terminology, guaranteed to perplex Southern audiences, is the law of bankruptcy in Scotland as it applies to individuals and assorted others.
But maybe for no longer. The Bankruptcy (Scotland) Act 2016 has reached the statute book. It’s a consolidating act, encompassing statutes from 1985, 1993, 2002, 2007, 2012 and 2014. It introduces a new and fairly modern framework, the aim being to make it less cumbersome and easier to use by those who do not have intimate knowledge of it (most of us!).
The Bankruptcy (Scotland) Act 2016 (the “Act”) received Royal Assent on 28 April 2016 and is expected to come into force by the end of the year.
The Act is only the second piece of primary consolidation legislation to have passed through the Scottish Parliament and brings together the various laws on personal insolvency into a single piece of legislation.
At the moment, the law is rather unwieldy and difficult to follow in practice.
Conflict liquidators have been appointed by the High Court to a group of companies to investigate claims by the director that the companies’ bank had artificially distressed the companies and driven them into administration.
Background
The Angel Group of companies was founded by Ms Julia Davey. They owned residential and commercial properties which were rented out. The companies borrowed substantial amounts from Lloyds HBOS. After getting into financial difficulties, the bank appointed administrators from KPMG over them.
The administrators of collapsed forex currency broker Alpari (UK) have announced that the creditors’ meeting will be held on 12 March. See the link below for further details.
The government has indicated that it will raise the financial threshold for creditors petitioning for an individual's bankruptcy through an amendment to the Insolvency Act 1986. From 1 October 2015 a creditor will need to be owed at least £5,000, rather than £750 as at present. This change, coming very shortly after the recent abolition of the remedy of distress, will inevitably serve to further limit landlords' armouries when attempting to recover arrears from tenants.
Re Christophorus 3 Limited [2014] EWHC 1162 (Ch)
An investigation is to be carried out into the causes of the bankruptcy of OW Bunker (“OWB”), the largest ship fuel supplier in the world. Investigators from two Danish law firms and Ernst & Young will try to establish the reasons for the failure of OWB less than a year after it was listed at a value of $1 billion. OWB has blamed its failure on hedging losses of $150 million, attributable to the falling price of oil and on a credit line estimated at between $120 and $130 million given by OWB’s subsidiary in Singapore, Dynamic Oil Trading (“DOT
D & D Wines was a leading distributor of wines, which went into administration. One of its clients was an Australian wine producer called Angove. Two of Angove’s customers, who dealt through D & D, paid the company shortly after it had gone into administration and after Angove had terminated the agency agreement. Despite this, the Court of Appeal ruled that the money belonged to the company in administration for the benefit of all its creditors and was not held on trust for Angove.
Re Christophorus 3 Limited [2014] EWHC 1162 (Ch)