The Court of Appeal has considered whether interim dividends paid to a shareholder at a time when the company did not have sufficient distributable reserves, making the payments unlawful, could later be reclassified as salary payments.

Facts

Delivering on the announcement in the Autumn Budget, HMRC issued its consultation "Protecting your taxes in insolvency" on 26 February 2019. The consultation proposes legislation that will give HMRC the elevated status to secondary preferential creditor in a company's insolvency. If this is implemented, HMRC will have priority to recover certain taxes from insolvent businesses ahead of other creditors from 6 April 2020.

In a decision to be welcomed by ratepayers, the Court of Appeal in Rossendale Borough Council and others v. Hurstwood Properties (A) Limited and others [2019] EWCA Civ 364 has confirmed that certain types of mitigation schemes are not sufficient to pierce the corporate veil and transfer liability for business rates to the beneficiaries of those schemes.

Liability for business rates

A year after its collapse, Carillion's insolvency continues to haunt both its supply chain and the wider UK construction industry. Many of those left unpaid had spent months chasing Carillion for payment, all the while staving off payment demands from others. Overnight, their debts became unsecured. The flow of cash from Carillion that would have paid its supply chain dried up. A cascade of consequential insolvencies was inevitable.

In the recent decision in LBI EHF v. Raiffeisen Bank International AG [2018] EWCA Civ 719, the Court of Appeal has considered the close-out valuation provisions for "repo" trades entered into under a Global Master Repurchase Agreement (2000 edition). The court refused to limit the wide discretion given to a non-defaulting party to determine fair market value under the GMRA.

The factual background

Friendly societies, along with other mutual societies, are registered with and regulated by the Financial Conduct Authority under the Co-operative and Community Benefit Societies Act 2014 (the Act).

Clydesdale Bank Plc v. (1) R Gough (t/a JC Gough & Sons) (2) Anne Michelle Gough [2017] EWHC 2230 (Ch)

 (1) Citicorp Trustee Company Limited and (2) Golden Belt Sukuk Company BSC v. (1) Maan Al-Sanea and (2) Saad Trading, Contracting and Financial Services Co [2017] EWHC 2845 (Comm)

In this case, the High Court considered whether valid service had been effected upon two defendants based outside of the jurisdiction who had shown no willingness to be involved in the proceedings.

Shortly after the last ever Monarch Airlines flight landed at Manchester Airport in the early hours of Monday morning, the airline entered administration, prompting the Civil Aviation Authority (CAA) to launch its "biggest ever peacetime repatriation" to bring home the 110,000 Monarch customers stranded abroad.

The impact on those travellers should be minimal, but an estimated 750,000 customers' future flights and holidays have been cancelled. Where they stand primarily comes down to whether their booking is protected by the UK's Air Travel Organisers' Licence (ATOL) scheme.

The Pre-Action Protocol for Debt Claims comes into force on 1 October 2017. This note deals with the key elements to be aware of.

Applicability

While the Protocol is named the Pre-Action Protocol for Debt Claims the first thing to note is that it only applies to businesses claiming payment of debts from an individual (including individual sole traders) and does not apply to business-to-business debts.