Pre-packs involve the pre-determined sale of a business before it enters administration, allowing a sale within days of an administrator's appointment. Examples of pre-packs include Dreams, JJB Sports and stockbroker Seymour Pierce. Pre-packs are a useful tool for the insolvency profession allowing businesses to be sold before being unduly damaged by the insolvency process, often saving jobs that might otherwise be lost.
This is an update to our September 2013 Blakes Bulletin: Increases to Alberta Licensee Liability Rating Program.
Historically, HMRC has allowed insolvency practitioners to, at an early stage following their
appointment, cancel the VAT registration of the insolvent business. Practitioners have then been
entitled to account for VAT on any subsequent supplies using HMRC’s form VAT 833 (Statement of
Value Added Tax on goods sold in satisfaction of a debt).
In Bailey & Others (Joint Liquidators of D&D Wines International Limited) v Angove’s Pty Limited1, the Court of Appeal overturned a decision of the High Court, and so permitted the liquidator of an insolvent agent to recover funds due to it from end-customers despite the agency having been terminated.
Background
On April 17, 2014, the Supreme Court of Canada denied leave to appeal to Nortel from the decision rendered by the Ontario Court of Appeal last October. For additional details and commentary on the decision of the Ontario Court of Appeal, please see our November 2013 Blakes Bulletin: Ontario Court of Appeal Applies AbitibiBowater Test in Concurrent Decisions.
The High Court (David Donaldson QC) has held in Enta Technologies Limited v HMRC [2014] EWHC 548 (Ch), that where a winding-up petition was brought by HMRC based on the non-payment of tax raised in assessments and the taxpayer's appeal against those assessments was pending, the winding-up court should refuse to adjudicate on the merits of the appeal and should leave that question to be dealt with by the First-tier Tribunal (Tax Chamber) ('FTT').
Background
The recent Court of Appeal decision in Rawlinson and Hunter Trustees SA & others v Akers & another [2014] serves to emphasise that third party reports commissioned by liquidators to enable them to consider whether litigation should be commenced in order to make recoveries for the benefit of creditors will not always attract litigation privilege.
In its decision on the Game Station1 appeal, the Court of Appeal has overturned the cases of Goldacre2 and Luminar3 holding that office holders of insolvent companies must pay rent of property occupied for the benefit of creditors on a “pay as you go” basis irrespective of when rent falls due under the lease.
The facts
Chapter 11
and CCAA
» A Cross-Border Comparison