A misfeasance claim under section 212 of the Insolvency Act 1986 (IA) is often a race against time to gather evidence and bring a claim before the limitation period expires. Not only can the breach pre-date the liquidation by years, but the difficulty is even greater where there is a maze of group companies and intra-group transfers. It takes time to properly work out whether a simple transfer of assets between group companies is actually a corporate shield hiding misappropriated assets.
House of Fraser (HOF) has been in the headlines for months. It started with reports of widening losses and being dragged down by soaring costs and a drop in consumer sales, but official comment from the 169-year old retailer remained positive. Then there were rumours of CVAs and negotiations with landlords leading to further controversy. Finally, last Friday (10 August 2018), a stock market announcement delivered the news that Mike Ashley’s Sports Direct had brought House of Fraser out of administration for £90 million, just hours after the store had announced its collapse.
As if business leaders did not have enough to contend with in the current economic and geopolitical climate, the trend towards increased personal accountability for company directors is continuing and can be expected to increase further. How can directors protect themselves? As a start it is important for both executive and non-executive directors to understand the overarching principles involved and how they link together.
The basic duties set out in the Companies Act 2006
As the nights drew in, the end of 2017 saw a flurry of case law on security for costs, and particularly its interaction with after the event (ATE) insurance and litigation funding. This article considers what insights can be gleaned for litigants who do not want to be left out in the cold.
Premier Motorauctions: security for costs and ATE
The raft of European and domestic litigation surrounding Mastercard fees has been long running and frankly, brain achingly complex. Hidden in the masses of litigation, the topic has sparked little interest in insolvency practitioners. However, it has the potential to generate realisations in liquidated estates where there may otherwise be nothing to offer creditors, and it warrants attention as a result.
Het voorontwerp Wet homologatie onderhands akkoord ter voorkoming van faillissement moet het een in financieel zwaar weer verkerende onderneming mogelijk maken om buiten faillissement of surseance haar schulden te saneren door een akkoord op te leggen aan alle schuldeisers. Een faillissement kan hiermee worden voorkomen. De rechten van schuldeisers en aandeelhouders kunnen hierbij worden gewijzigd.
Introduction
On 17 November 2017, the Supreme Court confirmed the existing case law that if employees are entitled to payment in cash for unused leave due to the bankruptcy of their employer, such claims are considered to be estate debts, regardless of when the entitlement to such leave accrued (ECLI:NL:HR:2017:2907). This ruling was given as a response to a request for a preliminary ruling by the Leiden Subdistrict Court.
Attachment of earnings - money is paid directly from the judgment debtor’s wages/salary into court by the debtor’s employer to satisfy the judgment debt.
Bankruptcy proceedings - you can currently apply to make an individual judgment debtor bankrupt for a judgment debt in excess of £5,000. The limit is £500 for applying to put a company into liquidation. The nuclear options.
On 24 November 2017, the Dutch Supreme Court ruled that in the event a suspension of payments is converted into a bankruptcy, interest that accrues after the suspension of payments was granted, but before the debtor was declared bankrupt, can be presented to the bankruptcy trustee for verification (HR 24 November 2017, ECLI:NL:HR:2017:2991).
Nu de verkoop van de inventaris meer dan een jaar voor het faillissement heeft plaatsgevonden, is het bewijsvermoeden van art. 43 Fw niet van toepassing. De stelplicht en de bewijslast ten aanzien van het paulianeus handelen rusten dan ook op de curator. De enkele omstandigheid dat het niet goed ging met de onderneming, betekent nog niet dat op dat moment te voorzien was dat een faillissement onafwendbaar was.