A recent case shows how a company’s Articles of Association, a document which defines the duties and responsibilities of members, must be adhered to when directors are exercising their powers.

The court had to consider whether a sole director of a company, whose articles required two directors for its board meeting to be quorate, could validly pass a resolution to appoint administrators under the Insolvency Act 1986 and, if not, whether the Duomatic principle could validate the appointment.

In the case of Newwatch Ltd v Bennett, the court ruled that After The Event insurance (ATE) policies could not be used as adequate security for costs by the claimant companies who were based in Denmark and Jersey.

A recent decision in the High Court has seen an application for pre-action disclosure of an insurance policy dismissed because the defendant was not insolvent.

Peel Port Shareholder Finance Company owned a warehouse that was damaged by a fire caused by Dornoch. They argued that their claim was highly likely to win but that, if it did, it would cause Dornoch to become insolvent.

Peel Port therefore sought ‘pre-action disclosure’, meaning Dornoch would have to disclose applicable insurance cover information to Peel Port before they decided whether to proceed.

Les multiples réformes menées par le Ministre de la Justice Koen Geens se traduisent également dans les procédures d’insolvabilité. Avant la réforme annoncée de la loi sur les faillites et de la loi sur la continuité des entreprises, la loi du 1er décembre 2016 modifiant le Code judiciaire et la loi du 8 août 1997 sur les faillites, instaure un Registre Central de la Solvabilité.

Since 1 January 2017, the law explicitly provides for a general option for the National Social Security Office (“NSSO”) to recover undisputed debts by means of a writ of execution. 

This means that the NSSO can provide itself an enforceable title (a writ of execution) without having to rely on the labor court. 

The recovery through a writ of execution can be used for all contributions, penalties, interests and other amounts that would be due to the NSSO. It is, however, important that it concerns debts: 

(i) that are not fundamentally disputed;

The Regulator has updated its guidance on assessing and monitoring the employer covenant in order to help trustees apply the defined benefit funding code of practice (“the Code”).

The guidance is intended to identify good practice for trustees in:

This article provides an essential update for insolvency practitioners on insolvency changes in 2015 and the proposed changes in 2016.

2015 Changes                

The Small Business, Enterprise and Employment Act 2015

In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.

The Pension Protection Fund (PPF) has issued a guidance note on Insolvency Practitioner remuneration which will apply where the insolvent company has a Defined Benefit Pension Scheme. The guidance note applies to pre and post appointment work.

The Guidance Note can be found here.

The Supreme Court has handed down its judgment in the case of The Trustees of Olympic Airlines SA Pension and Life Assurance Scheme –v- Olympic Airlines SA. Pitmans’ Trustee company, PTL, were the Appellants.

The question at issue was what connection must a foreign company, that has its Centre of Main Interests (COMI) in another EU country, have within the United Kingdom, to entitle an English Court to wind it up.