Recent weeks have seen a number of decisions concerning liquidations – in this article we explore three of the more interesting ones.
1) Overseas application of s.213 - Jetivia SA and another v Bilta (UK) Ltd (in liquidation) and others [2015] UKSC 23
The past three months have seen the publication of a spate of forthcoming regulatory and legislative changes. In this bulletin we investigate some of the more significant developments.
Insolvency Act 1986 (Amendment) Order 2015 – threshold for bankruptcy petitions
This order, which comes into effect on 1 October 2015, makes amendments to section 267(4) IA 1986, increasing the threshold for bankruptcy petitions to £5,000 (currently £750).
The Supreme Court has confirmed in Jetivia v Bilta that where a company brings a claim against its directors for losses caused by their wrongdoing, the directors cannot escape the claim by arguing that their actions are attributed to the company itself.
The Supreme Court also held that s.213 of the Insolvency Act, (which permits the Court to take action against those who have conducted the business of a company in order to defraud creditors) was not jurisdictionally confined and applied to people and companies resident outside the UK.
Employees who transfer to a new employer from a business that is under insolvency proceedings may be able to recover unpaid wages and other debts from the Secretary of State.
However, BIS v Dobrucki has confirmed that the Secretary of State will only pick up the liabilities of the old employer (the transferor). It will not be responsible for liabilities that are incurred after the transfer has taken place; that is, any liability of the new employer (the transferee).
The background
The 18 March saw George Osborne’s budget speech, heralded by Mr Osborne announcing that “Britain is walking tall again” and promising to “use whatever additional resources we have to get the deficit and the debt falling”. We examine what the drivers behind the hyperbole might mean for the insolvency community.
Further austerity as the key theme
This quarter has seen a wave of legislative and regulatory reform on the way. We review some of the more significant developments.
Insolvency exemption to the Jackson reforms extended indefinitely
Introduction
Carey Olsen’s restructuring and insolvency team has succeeded in applying to the Royal Court for the restoration of K2 Insurance Limited (“K2”), a liquidated and dissolved company, enabling the company to subsequently recover a substantial asset. Advocate David Jones and Associate Harry Stirk acted for Ian Damarell of BDO Limited, the liquidator of K2.
The Facts
This article provides snapshot of some of the more incidental goings-on of which we believe practitioners should be aware. Amongst other things, it covers developments in the reform of the EC Regulation, the consultation on the new-look SIP 16, and the Comet decision on the extent of the court’s S.236 powers.
EU Council adopts agreement on EC Insolvency Regulation reforms
First in the lineup, the Council of the EU agreed a compromise agreement with the EU Parliament on the proposed amendments to the EC Insolvency Regulation (Reg EC 1346/2000).
This article focuses on the judgments delivered in June and October 2014 by the Guernsey Court of Appeal in the long-running Tchenguiz litigation [Investec Trust (Guernsey) Limited and Another v Glenalla Properties Limited and Others]. The litigation concerned the liabilities of a trustee to creditors in circumstances where the creditor claims far outweighed the value of the trust fund.
The PPF’s final levy rules for 2015/16 published at the end of last year largely confirmed the consultation drafts but included changes in some details.
We recap on what was known before the final rules came out. Then we look at the changes in the final rules.
Changes already confirmed
Insolvency scoring