The High Court has provided useful guidance as to how receivers should apportion their fees to accounts receivable and inventory.
This Brief Counsel draws out some key messages from the judgment.
A recent High Court decision by Justice Heath on the new section 30(2B) of the Receiverships Act 1993 (the Act) provides guidance as to how receivers should account for their remuneration and expenses when dealing with accounts receivable and inventory.
The key points are as follows:
Just what is an account receivable has been the subject of much debate, because it determines what assets are used to satisfy preferential claims, i.e. who gets paid first in a receivership or liquidation. In 2008, the High Court judgment in Commissioner of Inland Revenue v Northshore Taverns (in liq) confined “accounts receivable” to “book debts”. Although since criticised, that judgment was the only judicial authority on the point.
Burns & Agnew v Commissioner of the Inland Revenue and Strategic Finance Limited (in rec) concerned a dispute between a secured creditor and the IRD (as a preferential creditor) in respect of certain funds received by the liquidators of Takapuna Procurement Limited (TPL). The liquidators applied to the High Court for directions as to the application of those funds and this required the Court to undertake an analysis of the concept of an "account receivable" for the purposes of determining whether such funds could be applied to satisfy preferential claims under the Seventh
Poland’s Supreme Court in a recent ruling found a grant of security for parallel debt to be invalid.
On 9 October 2009, a three-judge panel of the Supreme Court issued a judgment (file no. IV CSK 145/09), in which it ruled that the Polish legal system provides for the possibility to secure claims under a parallel debt (created under foreign law).
Facts of the case
In re Caribbean Medical Testing Center, Inc. (Bankr. D. Puerto Rico) Case no. 11-06124
In re Hotel Airport Inc. (Bankr. D. Puerto Rico) Case no. 11-06620
The Romanian legal framework on insolvency procedure has been consistently improved following the enactment of Insolvency Law no. 85 (Law 85), which entered into force on 21 July 2006.
Background
The Romanian government has adopted, by means of Government emergency ordinance no. 91, the Insolvency Code. The Code gathers and amends all pre-insolvency and insolvency provisions in Romanian legislation relating to companies, groups of companies, credit institutions, insurance and reinsurance companies, as well as cross-border insolvency proceedings. It will enter into force on October 25, 2013 and will also apply to already ongoing insolvency proceedings.