A bill currently making its way through parliament is intended to enable increased scrutiny of the actions of directors of dissolved companies – and discourage the abuse of the voluntary strike-off procedure as an ‘alternative’ to insolvency proceedings. The measures relating to dissolved companies in the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (the “Bill”) have been contemplated for some time, originally raised in the government’s consultation on insolvency and corporate governance in 2018 (the “2018 Consultation”).

Monthly insolvency statistics released by the Insolvency Service indicate that company insolvencies are beginning to return to pre-pandemic levels - a trend which will no doubt be intensified by the partial relaxation of restrictions on winding up petitions at the end of September.

Following the recent surge in wholesale energy prices, we are seeing increasing numbers of energy supplier insolvency in the news and customers are finding themselves transferred to new providers.

The use of a company name which is the same or similar to the name of an insolvent company is fraught with complications. 

Were you at any stage involved in a company which went into liquidation or administration? Are you now involved in another business with the same or a similar name? If so, you could inadvertently have fallen foul of the criminal and civil liability under Section 216 of the Insolvency Act 1986. Joseph Miller explains the pitfalls of this complicated and often overlooked area of insolvency law.

Regulations have been published which, from 1 October 2021, will change the current restrictions on the use of winding up petitions (the regulations). A link to the regulations can be found here.

In summary, the regulations partially lift the temporary restriction on the use of winding up petitions imposed by the Corporate Insolvency and Governance Act 2020 and provide that:

The Government has announced the relaxation of the rules which were put in place in order to restrict the use of winding up petitions during the coronavirus pandemic. The changes, which come into effect on 1 October 2021 and will remain in force until 31 March 2022, are likely to prompt a significant increase in the number of petitions being presented to the court given the ever-increasing level of debt that has accumulated as a result of the pandemic.

Insolvency proceedings are typically launched by an administrator or liquidator during an insolvency process. The nature of modern insolvency litigation, including the market for assigning causes of action to third parties, has somewhat muddied the waters on how and where to commence proceedings. Two recent cases provide some valuable insight into the High Court’s approach.

There has never been a more disruptive time for business. Brexit and the resultant uncertainty arising from the pandemic have dramatically impacted the business landscape over the last 18 months. No matter what the sector, and no matter how big or small the company, every business has been affected by COVID-19 in some way.

The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021, which came into force on 30 April 2021, introduced several changes to pre-pack sales to connected parties in order to restore public confidence in this type of restructuring deal.

Rogue directors will find themselves in the firing line if and when The Rating (COVID-19) and Directors Disqualification (Dissolved Companies) Bill, which is currently making its way through parliament, comes into force. The proposed bill will enable the investigation and potential disqualification of directors of dissolved companies, and responds in particular to concerns around COVID-related fraud.

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