The recent case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) (Singularis) is an important decision affecting any institution that handles client payments, including banks. It decided that a stock broker was liable in negligence for having breached its duty of care to its customer, Singularis Holdings Ltd (in liquidation) (Singularis), by paying monies out of its client account on the instruction of one of Singularis' directors and its only shareholder, Mr Al Sanea.

Background

In the first case of its kind, the High Court in England has prevented a shareholder from splitting its shareholding in an attempt to defeat the approval of a scheme of arrangement under section 895 of the Companies Act 2006 (Scheme) by way of manipulation of legislative requirements in relation to Schemes which require approval by a majority in number representing 75% in value of the voting class of shareholders.

The Investment Bank Special Administration Regime (SAR) was introduced in 2011 in response to difficulties faced in the Lehman Brothers administration. Following a review of the regime by Peter Bloxham in 2014, and a Government consultation in 2016, the Treasury has introduced draft regulations to improve the regime - The Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017.

Shortly before insolvency, financially distressed companies often receive monies which appear "morally" to be due to third parties, such as customer deposits or monies due to be received by the company as agent on behalf of its principal. If the company then enters an insolvency process, can it keep the money, leaving the customer/principal with no more than the right to prove, as an unsecured creditor in the insolvency? Or should the money be protected by some form of trust in favour of the "morally entitled" recipient?

Richard Obank comments on recent experience in handling the collapse of UK arthouse and indie film distributor Metrodome Group and the challenges facing film distributors generally.

We acted on the pre-pack administration sale of Metrodome Group to 101 Films, which completed in August following a lengthy unsuccessful attempt by management to find a buyer.

Welcome to the latest edition of DLA Piper’s monthly newsletter – Pensions Round-Up – in which we provide an overview of developments in pension legislation, case law and regulatory guidance. In this edition we look at key developments from October 2016 including the following. ■ The Pensions Regulator: the publication of reports which look at cases concerning the power to declare scheme amendments void, failures to complete the scheme return, and the potential use of the Regulator’s anti-avoidance powers.

On the Horizon

Welcome to the second edition of the On the Horizon newsletter - a regular update on upcoming cases and anticipated regulatory developments by the DLA Piper Banking and Finance Litigation team.

AUTUMN 2016

Cases to watch

The aim of a payment action is to recover monies due. Obtaining a positive judgment from the court is just the first step in that process. The party with the benefit of the judgment still needs to enforce the order if payment is not made. This guide describes what enforcement means in practice and the approach to enforcement in Scotland.

Getting started

To enforce a court decree in Scotland, creditors need to do the following:

Political and economic uncertainty in the aftermath of the referendum result in the UK has dampened sentiment on the high street and hit consumer confidence.

According to the National Institute of Economic and Research, there is an "even" chance of Britain falling into recession by the end of next year and the Bank of England has significantly reduced its growth forecast for 2017.

In Quadrant Structured Products Co. v. Vertin, 2015 WL 2062115 (Del. Ch. May 4, 2015), the Delaware Court of Chancery (Vice Chancellor J. Travis Laster) announced a bright-line standard governing the threshold inquiry of when a creditor can maintain a derivative suit against directors for breach of fiduciary duty. The court held that a creditor need only establish that the company was balance sheet insolvent at the time the suit was filed and that the creditor’s standing will not be extinguished if the company rides back into solvency during the litigation.