How has HMRC managed its metamorphosis from benevolent supporter of businesses during the pandemic to hard-nosed tax collector?

The collapse of fashion retailer Missguided has prompted official complaints to the Insolvency Service from suppliers who have alleged that the online brand continued trading and ordering new supply despite the prospect of insolvency. Alex Jay spoke to the Guardian and Yahoo! Finance about what the retailer going into administration could mean for suppliers, and the potential for legal action.

Background

Delaware has seen a significant uptick in the number of assignment for the benefit of creditors (ABC) filings. Through recent decisions, the Court of Chancery has sent a strong message that it expects parties pursuing this bankruptcy alternative to do a better job of justifying the relief they seek. This will require significantly more frequent and robust disclosures to the court and public.

Alex Jay, Tim Symes, Charlie Mercer and Aleks Valkov consider a recent decision relating to alleged transactions defrauding creditors under section 423 of the Insolvency Act 1986 (“s423”). Stewarts act for the fifth, sixth and eighth defendants.

Environment, social, and governance (ESG) are factors directors, investors, industries, and governments increasingly focus on when making commercial decisions. This is particularly so given increasing public awareness of such issues following recurrent environmental disasters and international summits such as COP26. Tim Symes and Ryan Hooton review the current regulatory environment in the UK, how it might bite on a company’s insolvency and when directors may find themselves personally liable for their actions.

Chris Corbin and Jeremy King, part owners of the company that owns the famous Wolseley restaurant had their company pushed into administration by its co-owner and major lender, having been in default since 2020, and now owes £38m. Administration might not have come as a surprise to anyone in that case.

However, directors and shareholders will not usually get anything like as much notice of a lender’s intention to appoint administrators and will frequently get none at all, as  Insolvency and Asset Recovery Partner Tim Symes explains here.

From 15 February 2022, the UK Insolvency Service is granted new powers to investigate and disqualify or prosecute directors of dissolved UK companies. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act (the Act) extends the Insolvency Service’s powers, on behalf of the UK Business Secretary, to deal with company directors who abuse the company dissolution process.

With many businesses headed towards a ‘winter of discontent,’ dealing with a combination of the after effects of Covid19 related disruption, supply chain issues, soaring inflation and labour shortages, we are undoubtedly going to see a continued rise in insolvencies over the coming months which will emerge in many different and often unpredictable forms.

What could happen this winter?

Introduction

For some time, the reliance on section 553C of the Corporations Act 2001 (Cth) (Act) as a "set-off" defence to an unfair preference claim, under section 588FA of the Act, has caused much controversy in the insolvency profession. Defendants of preference claims loved it, liquidators disliked it and the courts did not provide clear direction about its applicability – until now.