Limited liability is not complete protection for directors and they must carefully consider their actions and, indeed, failures to act in order to avoid “piercing the corporate veil”.  Directors may be ordered to contribute to the assets of the company even where they have not acted dishonestly.

A common issue facing landlords of commercial premises is to decide what to do if one of its tenants has stopped paying the rent and has entered into one of the types of insolvency prescribed by statute. In the case of companies, these can include company voluntary arrangements, administration, administrative receivership, Law of Property Act receivership or liquidation. In the case of individuals, they might include individual voluntary arrangements or bankruptcy.

TiBs frequently assign the right to recover debts due to the bankrupt’s estate. The advantage to the TiB is that he receives a lump sum or a share of the proceeds of a successful claim for the benefit of the bankrupt’s creditors without having to fund and pursue litigation himself. In most cases, once a TiB has assigned the right to recover the debt that will be the end of the matter; he just has to wait for the litigation to be concluded when payment of the agreed share will be made. A recent Court of Appeal decision means that this will not always be the case.

Earlier this year, the High Court gave judgment in a case involving a bankrupt who owned property in Morocco (Saunders v Donovan, unreported). The bankrupt had also granted someone a power of attorney in respect of the Moroccan property. The question that fell to be decided by the High Court was four-fold:

In Re Ruiz (a bankrupt) [2011] EWHC 913 (Fam) the High Court ruled that a wife’s right to occupy the matrimonial home did not prevent her husband’s trustee in bankruptcy (TiB) gaining and enforcing a proprietary interest in the property.

The Facts

M and G married in 2001 and moved into a house purchased by M and registered in his sole name. In 2006 divorce proceedings were initiated, following which G obtained a freezing order over M’s assets and an occupation order over the marital home.  

The new bankruptcy provisions contained in the Civil Law (Miscellaneous Provisions) Act 2011 were commenced yesterday. The Act has been in force since 2 August.

The new provisions allow for automatic discharge on the 12th anniversary of a bankruptcy adjudication order and a reduction in the period for application for discharge from bankruptcy to five years from 12 years.

The Civil Law (Miscellaneous Provisions) Act 2011 was signed into law by the President on 2 August 2011.  The Act provides for certain provisions, concerning private security services, bankruptcy and family mediation services, to come into operation on such days as the Minister for Justice and Equality, by order, appoints. All other provisions of the Act came into force on 2 August.

The Act introduces a number of important reforms across a broad range of areas, including:

In relation to the Great Lakes UK Limited Pension Plan a settlement was again reached before a full hearing with the Determination Panel could take place as reported by tPR on 13 July 2011.

Toward the end of 2009 the Republic of Ireland’s then government passed legislation which would lead to the creation of the National Assets Management Agency (NAMA). The role of NAMA was a simple one: to remove toxic debt from the books of the Irish banks to assist in attempts to revive the national economy. The security would be acquired at a discount and purchased with Government backed bonds. In the first phase of NAMA (focusing on mortgages and other secured facilities with a minimum value of £20m) over £80bn in toxic debts were acquired.

A CVA was introduced as one of the rescue arrangements under the Insolvency Act 1986. It allows a company to settle unsecured debts by paying only a proportion of the amount owed, or to vary the terms on which it pays its unsecured creditors. Whilst a CVA only requires approval of a 75% majority of the creditors by value, it binds every unsecured creditor of the company, including any that voted against it or did not vote at all.