We have become used to a regular stream of decisions in which the courts are prepared to grant administration or winding up orders in respect of overseas companies which have COMI or an establishment in the UK. The decision inRe Buccament Bay Limited and another [2014] EWCH 3130 is a rare exception in which the court has refused to exercise its discretion.

The background

The PPF is going ahead with the new insolvency scoring system developed by Experian.

It is also raising its requirements for contingent asset guarantees.

Partnerships which are breaking up face a series of urgent problems – particularly where the business itself is becoming insolvent. These difficulties can be amplified by failing relationships between the partners (who have to work together to wind up the business) and the potential need to realise assets rapidly to stave off the appointment of liquidators.

Heads of Terms’ or ‘Memoranda of Agreement’ (“MoA”) are commonly agreed by parties as a precursor to entering into more substantial agreements.

MoA are often intended by the parties to be broad statement  of commercial intent to enter into a contract, rather than having contractual force themselves. Accordingly, MoA are often drafted with a more relaxed attitude towards their contents

However, no matter what the parties may have intended, a MoA can easily amount to a contract depending on its drafting, exposing the parties to unintended liabilities.

Key Points:

There are three things prudent insolvency practitioners can do when left with non-company assets.

A not too infrequent issue for insolvency practitioners: what can you do with unclaimed assets of third parties? Clayton Utz recently acted for the receivers and managers of Arcabi Pty Ltd (In Liquidation) (Receivers and Managers Appointed) (known as “The Rare Coin Company”) and developed a strategy to deal with the issue.

Background

Key Points:

Courts will limit an administrator's liability where proposed funding is to be used directly to advance an agenda consistent with the objects of Part 5.3A of the Corporations Act.

A recent decision of the NSW Supreme Court highlights the flexibility of Part 5.3A of the Corporations Act and the ability of administrators to seek orders protecting their interests and facilitating restructures, and was the first stage of what promises to be a novel and challenging administration (In the matter of Nexus Energy Ltd [2014] NSWSC 1041).

The recent unreported decision of the Bristol District Registry of the High Court in Blue Monkey Gaming Limited v Hudson & Others [2-14] All ER (D) 222 provides useful guidance for insolvency practitioners on the extent of their duties in respect of identification and preservation of ROT stock.

What was the case about?

The practice of energy companies in insolvency situations has long been a cause for frustration: in most cases the supplier will terminate the existing supply contract and a new - deemed - statutory contract at much higher rates will then apply.

After six years of legal action and investigations, the Pensions Regulator (TPR) has agreed a £184 million settlement with PwC, administrators for the Lehman Brothers Group, which has secured members' benefits under the UK pension scheme.  It also means the scheme will not go into the Pension Protection Fund (PPF).

Following the insolvency of the Lehman group in 2008, TPR began regulatory action in 2010 seeking the issue of a Financial Support Direction (FSD) to certain UK group companies.  An FSD requires recipients to provide extra financial support to a scheme.

Key Points:

This case presented a difficult and unique set of circumstances for the court to navigate while the scheme clock was ticking.

The recent approval of the David Jones scheme of arrangement demonstrates how, in the absence of shareholder opposition, the inexorability of a scheme timetable can cause problems for a court when there is a major development after the first court hearing.