Key points

Earlier this week, the English Court of Appeal overturned the recent decisions in Goldacre (Goldacre (Offices) Ltd v Nortel Networks UK Ltd [2009] EWCH 3389 (Ch);2011 Ch 455) and Luminar (Leisure (Norwich) II Ltd v Luminar Lava Ignite [2012] EWCH 951 (Ch)) regarding the treatment of rent in an administration.

The Court of Appeal has unanimously upheld an order refusing to strike out a claim by a “one-man” company in liquidation, which had been the vehicle for a VAT fraud, against its former directors and overseas suppliers alleged to have been involved in the fraud.

Summary

On 24 July 2013, the Supreme Court handed down its long-awaited judgment in the Nortel/Lehman case: Re Nortel Companies [2013] UKSC 52. The Court looked at the position where a contribution notice (CN) or financial support direction (FSD) was issued by the Pensions Regulator (TPR) on a company that is already in insolvency proceedings in England (eg administration). How does the relevant obligation rank in the order of priority of payment?

The judgment handed down on 6 June 2013 by the Court of Appeal in the case of The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA [2013] EWCA Civ 643 reversed a High Court decision made in May 2012 that a winding up order could be granted in the UK in respect of Olympic Airlines, the Greek national airline, which was in liquidation in Greece as a result of it receiving illegal state aid and the privatisation of the airline business.

On 6 June 2013, the Court of Appeal reversed the High Court’s decision in The Trustees of the Olympic Airlines SA Pension & Life Insurance Scheme v Olympic Airlines SA from May 2012.

This corporate update summarises certain decisions in the Court of Appeal and the Supreme Court relating to the balance sheet insolvency test, agreements to agree and the exercise of contractual discretion. The decisions clarify the law in a number of areas of day-to-day relevance.

UK BALANCE SHEET INSOLVENCY TEST: Implications for lenders and borrowers

Background

The Court of Appeal has given guidance on when the duty of directors to have regard to the interest of creditors arises. This is an important point, as the general statutory duty of a director to promote the success of the company for the benefit of the company's members is expressly subject to the rules on creditors' interests. The court's decision also considers whether a dividend payment can be challenged as a transaction at an undervalue under section 423 of the Insolvency Act 1986.

Facts

Khandanpour v Chambers [2019] EWCA Civ 570

Should relief from sanctions be granted where a judgment debtor purports to appropriate monies paid to satisfying a procedural condition for setting aside a default costs order, but the creditor purports to appropriate the monies instead to the judgment debt?

Background

Regulation 7(1) of TUPE usually makes a dismissal automatically unfair if it is for a reason connected with the business transfer. But what if the reason for the dismissal is actually good old personal dislike and the transfer is just the context in which it surfaced?