On the eve of trial, the Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, has discontinued disqualification proceedings brought in January 2021 against five former non-executive directors (NEDs) of Carillion plc. The trial, which had been listed for around 13 weeks (and originally as long as 6 months) had been due to start on Monday 16 October 2023.

In the current economic climate, more and more companies are getting into financial difficulties, informal workouts by debtor companies, with support from certain creditors, seem to be increasingly common.

Sam Bankman-Fried is scheduled to be tried on eight charges starting on 3 October 2023, and US District Judge Lewis Kaplan has allowed for a second trial on 11 March 2024 on a further five charges that include bribing Chinese officials and committing financial fraud. The charges centre around the alleged fraud and conspiracy to defraud crypto investors and customers in FTX and Alameda Research.

The High Court has held that there is no common law rule preventing enforcement of a foreign judgment in England and Wales simply because it is not presently or fully enforceable in the relevant foreign jurisdiction.

When a company is in the so-called “twilight zone” approaching insolvency, it is well-established that the directors’ fiduciary duties require them to take into account interest of creditors (the so-called “creditor duty”).

In a recent case, the High Court has had one of its first opportunities to consider BTI v Sequana [2022] UKSC 25 (see our previous update here), in which the Supreme Court gave important guidance on the existence and scope of the duty of company directors to have regard to the interests of creditors (the so-called “creditor duty”, which arises in an insolvency scenario).

The judgement raises important questions for directors faced with substantial liabilities

The increasing rates of insolvencies in Small and Medium Enterprises (SMEs) following the COVID-19 pandemic is continuing at a high rate, and England and Wales have seen the highest rates of insolvencies since 2009. Compared with the second quarter of 2022, the total of registered company insolvencies has increased by 13%. Compared with the first quarter of 2023, the rate of insolvencies has increased by 9%.

The Federal Court of Australia recently determined an application brought by the administrators of a company in voluntary administration seeking judicial guidance on how to deal with claims for costs and interests resulting from two prior arbitrations. The key issue was whether the costs and interests awarded in the previous arbitrations were admissible to proof in the administration of the company, having regard to the fact that the relevant arbitral awards were made after the appointment of administrators.

The Court made a distinction between the two arbitrations as follows:

The Parliamentary Joint Committee on Corporations and Financial Services (the Committee) has delivered its report following an inquiry into the “effectiveness of Australia’s corporate insolvency laws in protecting and maximising value for the benefit of all interested parties and the economy”.