In Brief

On 1 August 2016, six years after it received Royal Assent, the UK Third Parties (Rights Against Insurers) Act 2010 (the "2010 Act") will finally come into force. It is expected to provide an effective mechanism for third-party claimants to seek recovery directly from an insolvent defendant's liability insurers.

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Much like the English Scheme of Arrangement which has become a popular debt restructuring solution for international debtors, the English High Court is an attractive forum for insolvency litigation thanks to the potent combination of wide-ranging powers available to Insolvency Practitioners (IPs) under the Insolvency Act 1986, and the increasing availability of litigation funding arrangements in the London market.

Varden Nuttal Ltd v Michelle Louise Baker (2016)

It was decided that a bankruptcy order should have been made in circumstances where the debtor had misled the creditors when agreeing and entering into an Individual Voluntary Arrangement (“IVA”).

Background

The Court of Appeal upheld the finding at trial of HHJ Bird (sitting in the High Court) that save where there is fraud, a debtor is not legally obliged to volunteer information to an assignee regarding his arrangement with the assignor. The dispute arose because Bibby, a factor (and ‘Assignee’), purchased debts from Morleys Ltd (‘the Assignor’), owed to it by HFD Ltd and MCD Ltd (the ‘Customers’/‘Debtors’). The contract between the Assignor and Customers was such that the latter were entitled to a rebate, at the beginning of each calendar year, on purchases made.

Welcome to the third article in this amazing series which looks at what you can do to try to extract money from a stubborn business debtor.

More than a decade after the enactment of chapter 15 of the Bankruptcy Code, issues pertaining to recognition of a foreign debtor’s bankruptcy or insolvency proceeding under chapter 15 have, in large part, shifted from the purely procedural inquiry (such as the foreign debtor’s center of main interests, or “COMI”) to more substantive challenges regarding the limits, if any, that chapter 15 places on U.S. bankruptcy courts. But as demonstrated by the recent ruling in In re Creative Finance Ltd. (In Liquidation), 2016 BL 8825 (Bankr. S.D.N.Y. Jan. 13, 2016), U.S.

From 6 April 2016 an application for an individual resident in England and Wales to go bankrupt will be an online procedure (in Northern Ireland, the changes will apply from November 2016). This change was brought about by the Enterprise and Regulatory Reform Act 2013.

A debtor will complete an online application to be reviewed by a newly created “Adjudicator”, where previously an application was made in person to the Court. As a result of the changes the court will only be involved in a minority of cases involving an appeal or a post-order application, thus freeing up court time.

From 6 April 2016, debtors in England and Wales who wish to enter bankruptcy will need to apply online and will no longer be able to petition the Court. The final form statutory instruments to introduce the necessary changes were published on 22 February 2016.

Section 262(1) of the IA 1986 provides that a debtor, creditor or nominee may apply to the court where: (a) a voluntary arrangement approved by a creditors’ meeting summoned under section 257 unfairly prejudices the interests of a creditor of the debtor, or (b) there has been some material irregularity at or in relation to such a meeting. 

Welcome to the second article in this amazing series which looks at what you can do to try to extract money from a stubborn business debtor.

In the first article I looked at the potential benefits and detriments of issuing a County Court Claim.  This time I will take a step back and look at what you could do prior to going to Court with your completed forms and a large cheque for the ever-growing Court fee. You can read this article here.