On 15 January 2015, it was announced that the bankruptcy creditor petition limit will be increased from £750 to £5,000 following a consultation into insolvency proceedings.

Business Minister, Jo Swinson said:

In Graves v Capital Home Loans Ltd [2014] EWCA Civ 1297, it was held that the appointment of Law of Property Act Receivers by a mortgagee because the borrower lacked the mental capacity to manage his financial affairs was valid even if the borrower was mentally fit by the time of the appointment. It was further held that the treatment of the borrower by the lender in such circumstances did not give rise to an unfair relationship under ss 140A and 140B of the Consumer Credit Act 1974 (CCA 1974).

Background

In Spencer Day v Tiuta International Ltd and other [2014] EWCA Civ 1246, the Court held that a creditor who relies on subrogation is still a secured creditor, and therefore cannot be subject to a set off claim for unliquidated damages as per Natwest v Skelton (1993).

Background

This article provides snapshot of some of the more incidental goings-on of which we believe practitioners should be aware. Amongst other things, it covers developments in the reform of the EC Regulation, the consultation on the new-look SIP 16, and the Comet decision on the extent of the court’s S.236 powers.

EU Council adopts agreement on EC Insolvency Regulation reforms

First in the lineup, the Council of the EU agreed a compromise agreement with the EU Parliament on the proposed amendments to the EC Insolvency Regulation (Reg EC 1346/2000).

The PPF’s final levy rules for 2015/16 published at the end of last year largely confirmed the consultation drafts but included changes in some details.

We recap on what was known before the final rules came out. Then we look at the changes in the final rules.

Changes already confirmed

Insolvency scoring

Preamble

The background

Paragraph 71 of Schedule B1 to the Insolvency Act allows an administrator to apply to court to sell assets subject to a fixed charge as if they were not subject to the security. The case of O’Connell v Rollings and others [2014] EWCA Civ 639 is a rare illustration of such an application and provides useful guidance on the factors the court will take into account.

The background

We have become used to a regular stream of decisions in which the courts are prepared to grant administration or winding up orders in respect of overseas companies which have COMI or an establishment in the UK. The decision inRe Buccament Bay Limited and another [2014] EWCH 3130 is a rare exception in which the court has refused to exercise its discretion.

The background

The PPF is going ahead with the new insolvency scoring system developed by Experian.

It is also raising its requirements for contingent asset guarantees.

Partnerships which are breaking up face a series of urgent problems – particularly where the business itself is becoming insolvent. These difficulties can be amplified by failing relationships between the partners (who have to work together to wind up the business) and the potential need to realise assets rapidly to stave off the appointment of liquidators.