Philip Stephen Wallace (as liquidator of Carna Meats (UK) Limited) –and- George Wallace [2019] EWHC 2503 (Ch)
The High Court has recently revisited the question of whether section 236 of the Insolvency Act 1986 has extraterritorial effect and considered the differing views expressed in previous cases.
As reported in Building earlier this year (4 February) the construction industry experienced the highest number of insolvencies of any UK industry in 2018. Last year saw 2,954 firms become insolvent, an increase of 12% on the previous year and more than in any year since 2013. It is well known that the construction industry is particularly prone to insolvencies and there has been a great deal written about why that is the case and what can be done about it.
According to the recent case of Sell Your Car With Us Ltd v Sareen [2019] – yes, they are.
Historically the courts have looked dimly on the use of insolvency proceedings as a method of debt collection. For this reason, where an individual or company appears to have the means to pay a debt but apparently refuses to do so, the courts have implied that the only proper legal recourse is through litigation. In this case, the judge explained why she considers this submission to have been taken too far.
Background
In the past five years, insolvency rates in the construction industry have increased more quickly than in other industries across the UK. This article considers the common causes of construction insolvency and how to protect your position if insolvency occurs.
Recent trends
On 5 July 2019 the Minister of Justice submitted a bill to parliament that will add a new powerful tool to the Dutch restructuring toolbox. The bill on the “Act on the Confirmation of a Private Restructuring Plan” is expected to introduce a serious competitor to the UK’s Scheme of Arrangement and the USA’s Chapter 11. The introduction of the bill will move one step closer on 26 September 2019, when members of the parliament are scheduled to submit their questions and remarks on the bill to parliament’s Standing Committee on Justice and Security.
Insolvency may seem an unlikely scenario for your pension plan's employer today and for the foreseeable future but the Pension Protection Fund (PPF) has recently published guidance recommending that defined benefit pension plan trustees should make contingency plans for employer insolvency "as with any sensible business continuity or disaster recovery planning".
1. Introduction
Pantiles Investments Limited & Anor v Winckler [2019] EWHC 1298 (Ch)
Background
The Liquidator of the Pantiles Investments Limited (Company) brought a claim (among others) for fraudulent trading against its former director, Ms Winckler. The claim related to a property transaction involving Ms Winkler, an associate (Mr Goldbart) and the Company. In summary, the transaction was as follows:
Imagine that a debtor voluntarily concludes a transaction with a third party where he knows (or should know) that it hinders the creditor’s possibilities of collecting the debt. In civil law countries, a creditor can invoke the nullification of that legal act by means of a so-called actio pauliana. This raises the question of which court has jurisdiction in the case of an international dispute, regarding an actio pauliana, that is instituted by a creditor against a third party?