The draft Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2009 has now been published detailing the proposed changes to the Insolvency Act 1986. The aim of the changes is to reduce costs and the administrative burden on users of the legislation and subsequently benefi t the creditors of insolvent companies and individuals through more fl exible procedures and increased dividends.  

In the current climate, both landlords and tenants could be forgiven for wondering what would happen if the other became a victim of the recession. For both parties, a rent deposit deed can provide some comfort. Such a deed would mean the landlord has immediate access to cold hard cash if the tenant fails to pay the rent, while a struggling tenant may get valuable breathing space before the landlord turns to other remedies.  

With ever increasing numbers of corporate insolvencies, it is likely that the courts will see an increase in litigation raised by insolvency practitioners and creditors arising out of restructuring arrangements entered into by companies in an attempt to stave off insolvency.

While debt restructurings must always remain a significant part of the corporate recovery toolkit, all stakeholders must be aware of the underlying rules relating to the challengeability of transactions in the run up to insolvencies.

There are two main challengeable areas in Scots law:

The Calman Commission on Scottish Devolution was tasked with recommending changes to the present constitutional arrangements for Scotland. The Commission has now reported and has proposed that the UK Insolvency Service should have responsibility for lawmaking in respect of all elements of Scottish corporate insolvency with "appropriate input from the relevant department(s) of the Scottish Government".

The Pensions Regulator recently became involved in the current controversies attaching to pre-pack arrangements.

Company Voluntary Arrangements ("CVAs") have been in the news recently for all of the right reasons. The CVA proposal advanced by JJB Sports was approved by an overwhelming majority of creditors. This has allowed the survival of JJB Sports (JJB) in its current form and allayed fears that the company would be forced into administration or liquidation with consequent job losses and further detriment to creditors.

In the Budget, the Government announced two consultation processes aimed at breathing new life into the rescue culture.

The Insolvency Service intends to consult on the desirability of super-priority status for funding to companies that are in administration or that are subject to a company voluntary arrangement. Such a super-priority would allow lenders to participate in the restructuring and recovery of such companies to a greater degree.

The 22nd of April 2009 brings in significant changes to rules relating to arrestment and actions of furthcoming. The Bankruptcy and Diligence etc (Scotland) Act 2007 (Commencement No. 4, Savings and Transitionals) Order 2009 brings into force Section 10 of the 2007 Act which inserts Part 3A into the Debtors (Scotland) Act 1987. The provisions coming into effect include:

On 22nd April 2009, some significant changes to debt recovery legislation are due to come into force, affecting the procedures relating to inhibitions in Scotland. The provisions are a further step in the implementation of changes which are designed to make the debt recovery process more 'user friendly'. Part 5 of the Bankruptcy and Diligence etc (Scotland) Act 2007 brings about the following changes/clarifications:

In April 2008 the Bankruptcy & Diligence (Scotland) Act 2007 ("the Act") introduced a new regime for obtaining permission for (and recalling) diligence on the dependence of a court action (i.e. arrestment and inhibition). In terms of the Act, before granting (or recalling) warrant for diligence, the court must be satisfied that: