This update considers the recent High Court decision in Thomasand Another v Edmondson (12/05.2014) concerning the court’s ability to make an income payment order against a bankrupt who is already subject to an income payment agreement.

The background

This update focusses on Teresa Graham’s recent review on pre-pack administration published by the  Government which sets out areas for improvement and provides detailed recommendations to help better the procedure.

The background

Preamble

The COMI rules prevent a foreign based company from accessing the UK insolvency regimes, unless it has a sufficient connection with the UK. However, in Christophorus 3 Limited the High Court approved the ‘flipping up’ of a specially created UK newco in a German group to enter administration.

The background

The High Court described this case as ‘an elaborate scheme for the restructuring and refinancing’ of a German group.

Most Landlords, and Insolvency Practitioners (“IP”s), will be well aware of the issues and liabilities that can arise where a tenant (whether it be a company or individual, residential or commercial) experiences financial difficulties. Competing interests can lead to difficulties for all parties and, potentially, legal disputes.

Since the Welfare Reform and Pensions Act 1999 (“1999 Act”), it has been understood that the rights of a bankrupt under a tax approved pension plan are excluded from the bankruptcy estate and do not vest in his Trustee in Bankruptcy.

That said, where a Bankrupt was already drawing an income from his pension, his Trustee could seek an Income Payments Order over that income.

Many schemes will see a sharp increase in their levy next year  as a result of the PPF’s new and more discriminative insolvency  scoring system.

To give you an idea, the PPF expects:

Introduction

The Chancellor’s 2014 Budget speech revealed significant  changes to the way in which pension scheme members will be  able to access their savings. This move falls as just one of a raft  of changes to workplace pensions which Steve Webb MP has  described as a “pensions revolution”.

The Insolvency Rules 1986 (“IR 1986”) are to be replaced in their entirety by the Insolvency Rules 2015 (“IR 2015”).

The Insolvency Service has been running a long-standing ‘modernisation’ project to consolidate the 23 amending instruments to IR 1986 and provide a number of substantive amendments to existing insolvency law and practice. 

This update focusses on the recent Supreme Court decision in Re Lehman Brothers International (Europe) concerning the application of the “contributory rule” in administration and the admissibility and set-off of contingent claims in administration

Lehmans and the contributory rule

Preamble

Most if not all of our readers will be aware of a recent spate of decisions in which the English courts have been prepared to sanction schemes of arrangements (SofAs) for foreign entities having a “sufficient connection” with England and Wales. The latest decisions in Re Magyar Telecom B.V. (03/12/2013) show just how flexible the English courts can be in finding such a connection.

The background