How has HMRC managed its metamorphosis from benevolent supporter of businesses during the pandemic to hard-nosed tax collector?

King & Ors v Kings Solutions Group Ltd & Ors [2022] EWHC 1099 (Ch)

Background

This appeal arose in the context of long-running and complex dispute between the shareholders of Kings Solutions Group Limited (‘the Company’).

The collapse of fashion retailer Missguided has prompted official complaints to the Insolvency Service from suppliers who have alleged that the online brand continued trading and ordering new supply despite the prospect of insolvency. Alex Jay spoke to the Guardian and Yahoo! Finance about what the retailer going into administration could mean for suppliers, and the potential for legal action.

Alex Jay, Tim Symes, Charlie Mercer and Aleks Valkov consider a recent decision relating to alleged transactions defrauding creditors under section 423 of the Insolvency Act 1986 (“s423”). Stewarts act for the fifth, sixth and eighth defendants.

Environment, social, and governance (ESG) are factors directors, investors, industries, and governments increasingly focus on when making commercial decisions. This is particularly so given increasing public awareness of such issues following recurrent environmental disasters and international summits such as COP26. Tim Symes and Ryan Hooton review the current regulatory environment in the UK, how it might bite on a company’s insolvency and when directors may find themselves personally liable for their actions.

New requirements brought in during the Covid-19 pandemic have added to the potential procedural pitfalls facing creditors seeking a winding up order in recent months. They have also led to quite a lot of adjourned hearings and delays.

Chris Corbin and Jeremy King, part owners of the company that owns the famous Wolseley restaurant had their company pushed into administration by its co-owner and major lender, having been in default since 2020, and now owes £38m. Administration might not have come as a surprise to anyone in that case.

However, directors and shareholders will not usually get anything like as much notice of a lender’s intention to appoint administrators and will frequently get none at all, as  Insolvency and Asset Recovery Partner Tim Symes explains here.

Dispute Resolution analysis: Deputy ICCJ Schaffer has dismissed an application brought by the Respondents to a claim brought by the Joint Liquidators of BHS Group Ltd for wrongful trading. The failure to plead the relevant quantum of the claim was not a deficiency which merited strike-out.

Re BHS Group Ltd [2021] EWHC 3501 (Ch)

What are the practical implications of this case?

With many businesses headed towards a ‘winter of discontent,’ dealing with a combination of the after effects of Covid19 related disruption, supply chain issues, soaring inflation and labour shortages, we are undoubtedly going to see a continued rise in insolvencies over the coming months which will emerge in many different and often unpredictable forms.

What could happen this winter?

These case summaries first appeared in LexisNexis’ Insolvency Case Alerter. They represent some of the more interesting insolvency decisions to have been published recently.

This summary covers: