The insolvency of Scottish Coal Company Ltd ("SCC") has given rise to two recent Scottish Court of Session cases regarding performance bonds – East Ayrshire Council ("EAC") v Zurich Plc (24 June 2014) and South Lanarkshire Council ("SLC") v Coface SA (27 January 2015).
An action has successfully been brought by the administrators of Questway Limited, Oceancrown Limited and Loanwell Limited (all in administration) against Stonegale Limited and Norman Ralph Pelosi (the sole shareholder and director of Stonegale Limited) to reduce alienations of properties in Glasgow, under s.242(1) of the Insolvency Act 1986 (the “Insolvency Act”).
As part of the Scottish Government’s aim of introducing a “Financial Health Service” in Scotland, the Bankruptcy and Debt Advice (Scotland) Act 2014 will this year bring into effect some of the widest reaching changes to the law on personal insolvency seen in the last five years. We set out below a brief guide to the main changes, as follows.
1) Business DAS – introduced in December 2014
The insolvency trade body R3 have issued a useful guide to the insolvency process for creditors. The guide can be found here.
A frequent criticism is that the insolvency process (and indeed insolvency practitioners) do not do enough to engage with creditors. Partly this will be because of creditor apathy (who wants to throw good time after bad money?) but partly it is because creditors do not see the insolvency process as being structured to assist them.
The news that USC has taken steps to commence an insolvency process is further proof (if proof were needed) that despite what TS Elliot may have claimed, January really is the cruellest month.
Introduction
The Pensions Regulator has announced, following several years of proceedings and court skirmishes, that a compromise has been reached in relation to the Financial Support Directions (FSDs) issued under the Lehman Brothers UK pension scheme.
FSDs and the Lehmans case – a reminder
On 1 August, new guidelines came into force for Member States to use in assessing whether support measures to rescue and restructure firms in difficulty are compatible with State aid rules.
Background
The ongoing saga of the Scottish Coal Company liquidation provides the background to East Ayrshire Council v Zurich Insurance [2014] CSOH 102.
East Ayrshire Council (EAC) granted planning permission for a surface mine at Dalfad subject to restoration obligations on Scottish Coal. These obligations were secured by a restoration bond granted by Zurich Insurance. Following Scottish Coal's liquidation, it and its liquidators, were unable to carry out the restoration work.
In the recent case Blue Monkey Gaming v Hudson & Others the High Court held that the responsibility of identifying and proving title to goods under retention of title clause falls solely on the seller, not the administrators dealing with an insolvency.
Background