The New Jersey Appellate Division recently discharged a creditor’s judgment lien on the debtor’s property after the debtor declared bankruptcy and had the underlying debt discharged. SeeCooper Electric Supply Co., v. J & Jay Electric, Inc., 2020 WL 5496490 (N.J. Super. Ct. App. Div. Sept. 11, 2020). In 2008, plaintiff obtained a judgment against defendant and docketed the judgment. Although plaintiff received a writ of execution, the record was not clear on if plaintiff ever levied on defendant’s house.
Since Richard Branson’s Virgin Atlantic Airways Ltd’s request for Government loan was denied (see the post by my colleague, Jess), the airline has announced plans for a private-only solvent recapitalisation to "rebuild its balance sheet" and "welcome passengers back".
In a precedential decision, the United States Court of Appeals for the Third Circuit held this week that a creditor had the ability to bring post-bankruptcy claims against a debtor if the bankruptcy trustee abandoned those claims. SeeIn re Wilton Armetale, Inc., 2020 WL 4460000 (3d Cir. Aug. 4, 2020). Artesanias was a creditor of Wilton, and obtained a judgment of around $900,000 against it. Artesanias eventually learned that another creditor, North Mill, had plotted with Wilton and a law firm, Leisawitz Heller, to plunder Wilton’s assets.
It is an unfortunate reality that the number of insolvencies in the construction sector seems certain to rise in coming months as the economic impact of COVID-19 takes effect. In this context, the recent Supreme Court decision in Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25 is particularly relevant.
This case concerned important questions regarding the compatibility of two statutory regimes:
The government’s temporary changes to the insolvency rules to cater for Covid-19 – in particular the new restrictions on the presentation of winding-up petitions – have been well-publicised. These have now been packaged within an Act (the Corporate Insolvency and Governance Act (“CIGA”)) which also brought in significant, permanent changes to UK insolvency law.
The Corporate Insolvency & Governance Bill became law today - having had its first reading just over a month ago.
In summary, the provisions in the Act allow for:
Two of the classic self-help remedies open to landlords for recovering commercial rent arrears have traditionally been forfeiture and Commercial Rent Arrears Recovery (CRAR), but both of these have been restricted as a result of Government measures to support tenants during the coronavirus crisis. There is also a proposed ban on winding-up petitions for coronavirus-related debts, which is already being applied by the courts.
Amended CRAR Regulations
In a case that is sure to keep lawyers talking for months, the Supreme Court has decided the important case of Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd.
The case concerns the relationship between the statutory adjudication and insolvency set-off regimes.
The webinar looked at the widely debated issue of whether a company in liquidation can commence an adjudication by examining three recent cases on this topic.
Bresco v Michael J Lonsdale
The first being the Court of Appeal decision in Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd [2019] EWCA Civ 27, which has recently been heard in the Supreme Court but whose judgment is awaited.
Background
The Corporate Insolvency and Governance Bill is currently being fast-tracked through Parliament, but is the Government making a mistake in seeking to combine a short-term breathing space for businesses during the current Covid-19 crisis with introducing the greatest changes we have seen to UK insolvency laws for decades?