ADVISORY | DISPUTES | TRANSACTIONS Restructuring and insolvency roundup January 2018 In this roundup, we consider four cases with implications for all those involved in the restructuring and insolvency sector. This edition includes an article on crowdfunding, a sector which continues to be of interest to practitioners giving the changing regulatory landscape and the risk to investors. Other cases include two Court of Appeal decisions and cover privilege in bankruptcy, the adequacy of ATE policies, and the requirement for boards to be quorate when directors appoint administrators.
A recent application made by the insolvency practitioner of Agrokor, a major Croatian conglomerate, resulted in recognition in England of a stay of civil proceedings against the group. The purpose of the application was to halt any proceedings in relation to Agrokor's securities and debt obligations containing English law and jurisdiction provisions, pending the restructuring in the Croatian insolvency proceedings of the group's affairs.
In UBS AG v Kommunale Wasserwerke Leipzig GmbH(1) the Court of Appeal heard an appeal relating to whether complex, loss-making financial transactions were enforceable against the respondent (KWL) in circumstances where they had been entered into against the backdrop of a corrupt relationship between the appellant counterparty (UBS) and the respondent's agent (Value Partners).
Winding up petition struck out as an abuse of process where the court was not satisfied that the petitioner was a creditor.
Can a company file a notice of intention to appoint an administrator (NOI) if administration is just one of a number of potential options being explored for rescuing the company?
Are funds subject to an IVA if they are received by a debtor after a certificate of completion has been issued by the supervisor?
Should an administrator’s appointment be terminated where the motives of the appointor are improper but the statutory purpose of the administration can still be properly achieved?
On 28 March 2017, the Enactment of Extra-Statutory Concessions Order 2017[3] was made which, amongst other things, enacts ESC3.20. The Order came into force on 6 April 2017.
ESC3.20 disapplied the clawback of input tax credit for an insolvent business that has not paid (or not fully paid) the consideration for a supply. New section 26AA of the Value Added Tax Act 1994 gives broadly the same effect as ESC3.20 in that it “turns off” the disallowance of input tax in cases of non-payment of consideration if:
The insolvency service has published the latest figures for complaints against insolvency practitioners made to the Complaints Gateway during 2016. The statistics indicate that the Gateway has received a reasonably steady level of complaints since it was established in 2013 but promisingly for practitioners the Gateway does appear to be weeding out more complaints with the Gateway having rejected 29% of complaints in 2016, compared to 18% in the Gateway's first year.
The Stats