NFTs are a hot topic, but their treatment under insolvency law – which will receive more attention due to the recent crisis – has not yet been explored in much detail. This contribution aims to provide a brief overview of the most relevant issues.
NFTs as collateral
Due to their clear structure and organisation, insolvency proceedings are ideally suited for digitalisation processes. It is therefore more than surprising that despite Austria's pioneering role in the digitalisation of the justice system with its Justice 3.0 project, there has been no significant development in the expansion of digitalisation in insolvency proceedings since the early 2000s. The situation is different in Croatia, however, where the new Insolvency Act came into force in 2015 and was used as an opportunity to open the path towards digitisation.
Not all residential tenancies will be in the name of an individual. Sometimes it will be a company looking to take out the tenancy in their own name. Generally, this will be for the use of the one of the directors and their family. Often these sorts of agreements are seen as beneficial to many landlords who are under the impression that the company will be prompt with payment and ultimately good for the money. Whilst this can certainly be the case, it does not always work out this way.
On 4th May 2021 the government introduced some new legislation, which seeks to help households cope with debt, entitled The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England & Wales) Regulations 2020.
The Regulations apply to debtors who reside or are domiciled in England and Wales, and largely to personal debts. Some business debts are eligible but not if they relate solely to the business and the debtor is VAT registered, or if the debtor is in partnership with someone else.
What we've been up to?
In the six months since our last full newsletter, the UK has witnessed some monumental events, the most significant of course being the death of HM Queen Elizabeth II – followed by no less than three different occupants at Nos. 10 & 11 Downing Street, a UK record summer temperature of 40.3C, inflation hitting a 41 year high, startling increases in energy & food prices (exacerbated by the ongoing war in Ukraine) and, as of this month, the UK economy officially falling into recession.
The recent case of PSV 1982 Limited v Langdon [2022] has clarified what is a ‘relevant debt’ of a company which uses a ‘prohibited name’ and for which a director or person who manages that company can be personally liable for.
Who will be interested in this article?
The Insolvency Service has recently announced their proposal to increase the cost of deposits payable on creditors’ bankruptcy and winding-up petitions which are presented on or after 1st November 2022.
The proposal is as follows:
Bankruptcy Petition deposit increasing from £990 to £1,500
Winding-up Petition deposit increasing from £1,600 to £2,600
If the proposed changes are approved it will mean the overall fee to issue petitions (including the court fee) will be:
Oliver Fitzpatrick, a partner in the firm’s Business Support and Insolvency team, successfully acted for a company in resisting an application that was made against it by a petitioning creditor for permission to appeal earlier decisions made by Insolvency and Companies Court Judge Barber to (a) dismiss that petition forthwith and (b) have the petitioning creditor pay our client’s costs in dealing with the petition.
WHAT WE’VE BEEN UP TO
The team have been busy dealing with a wide range of instructions over the past few months.
Some of our recent highlights include:
The Supreme Court confirmed parties' freedom to contractually modify any of the prerequisites for set-off under Bulgarian law, thus permitting various quasi-security arrangements in commercial and financial contracts that creditors may avail themselves of.
Prerequisites for statutory set-off in Bulgaria