The recent case of F Options Ltd v Prestwood Properties Ltd concerned the setting aside of a transaction as a preference under section 239 of the Insolvency Act 1986.

A preference arises when a company's creditor is put in a better position than they would otherwise have been in the event of the company's insolvency. Transactions may be a preference whether or not the parties are connected, but where it can be shown that there is a connection within section 249 of the Insolvency Act 1986, two important advantages are gained:

The law allows any person to be treated as a director even though that person has not been formally appointed as a director. Such directors are known as de-facto directors. By contrast, a de jure director is a person who has been validly appointed as a director.

The recent case of Re Snelling House Ltd (In Liquidation) [2012] EWHC 440 (Ch) serves as a useful reminder to consider possible claims against de-facto directors who may be acting under the wrong impression that they are beyond reprehension.

The facts

The long awaited judgment in The Commissioners for her Majesty’s Revenue and Customs v. Football League Limited, on the so called “football creditors’ rule” (the “Rule”) has been given.

This article only concerns itself with the issue of whether the Rule was or was not considered void on the grounds that it was contrary to the pari passu principle and the anti-deprivation rule and not on the fairness of the Rule itself.

BESTrustees v Kaupthing Singer & Friedlander [2012] EWHC 629 (Ch) (High Court Chancery Division 16 March 2012)

Background

It is looking increasingly likely that 2012 will be another difficult year for the automotive sector, leading to a decline, not only in vehicle sales, but also in goods and services supplied to the sector. As a result, businesses may experience cash flow problems and increased creditor pressure to pay invoices.

We previously reported on Raithatha v Williamson (4 April 2012) where the High Court held that a bankrupt’s right to draw a pension was subject to an income payments order (“IPO”) even if the individual had yet to draw his pension. This judgment represented a significant departure from previous practice under the Welfare Reform and Pensions Act 1999 which protected future pension rights from IPOs and distinguished them from pensions in payment. It also effectively allowed a trustee in bankruptcy to compel a bankrupt to draw pension against his wishes.

In its recent decision in Lehman Brothers International (Europe) (in administration)¹  the Supreme Court resolves the uncertainty where a regulated firm does not properly segregate client monies. The decision has a number of practical implications, not only for the administration of Lehman Brothers International (Europe) (LBIE) but also for the way client monies are held by institutions.  

Background

Many employers dread triggering debts under section 75 of the Pensions Act 1995 within their defined benefit pension scheme, but in some circumstances it simply cannot be avoided.  Once a section 75 debt has been triggered it is important that the debt is calculated properly.  The Actuary is required to calculate the difference between the value of the scheme's assets and the cost of purchasing annuities to secure all of the liabilities of the scheme.  But what if there is a delay in calculating the debt?  At which date is the Actuary required to ascertain the cost of bu

The EU insolvency law has resulted in insolvent debtors shopping for a better jurisdiction in which to become bankrupt.  This article examines why and how.

Why?

The EC Regulation on Insolvency Proceedings 2000 (the ECIR), came into effect in May 2002, providing a framework for the national jurisdictions to work together by recognition of each states insolvency mechanisms.  However the EC Regulation does not harmonise substantive differences in insolvency law between the subscribing nations.

Regulation 7 of TUPE states that a dismissal will be automatically unfair if the main reason for dismissal is the transfer itself, or a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce (‘ETO reason’). This provision has caused some uncertainty where employees are dismissed by an administrator in order to make a business more attractive to a prospective (but as yet unknown) purchaser.