The practice of energy companies in insolvency situations has long been a cause for frustration: in most cases the supplier will terminate the existing supply contract and a new - deemed - statutory contract at much higher rates will then apply.

The High Court of England and Wales handed down judgment last week in the case of Christine Mary Laverty and others as Joint Liquidators of PGL Realisations PLC and others v British Gas Trading Limited [2014] EWHC 2721.  In an important decision for the insolvency industry, it was held that the statutory deemed contracts regime for gas and electricity supply could not be used by utilities companies to gain priority over other creditors.

The High Court has rejected the argument that amounts owing to British Gas Trading Ltd (BGT) under post-administration, deemed contracts for the  provision of gas and electricity are automatically classed as expenses of the administration. The  court has reserved for consideration, however, whether and if so how an administrator’s conduct may  give the liability super priority or bring the salvage principle into play.

Background and preliminary issue

Background

The ongoing saga of the Scottish Coal Company liquidation provides the background to East Ayrshire Council v Zurich Insurance [2014] CSOH 102.

East Ayrshire Council (EAC) granted planning permission for a surface mine at Dalfad subject to restoration obligations on Scottish Coal. These obligations were secured by a restoration bond granted by Zurich Insurance.  Following Scottish Coal's liquidation, it and its liquidators, were unable to carry out the restoration work.

Appeal Judges in the Court of Session yesterday issued a decision directing that the liquidators of Scottish Coal Company (SCC) cannot abandon sites or disclaim statutory licences imposing obligations on the company.

On 13 December 2013, the Court of Session ruled that the liquidators of The Scottish Coal Company Limited (SCC) were not able to disclaim ownership of certain open-cast mines and the environmental permits which were connected with the operation of those mines. This ruling followed an appeal by the Scottish Environmental Protection Agency (SEPA), and overturns the previous decision of 11 July 2013, in which it had been ruled that the liquidators were entitled to disclaim this property.

On 7 January 2013, the Regulator published a report detailing its decision to give clearance to entities in the UK Coal Group to pursue a restructuring plan agreed on by UK Coal's shareholders in November 2012.

With the gradual opening of energy supply markets allowing new energy providers to challenge the established providers and bring increased competition to the market, the last two decades have seen an increase in smaller energy providers entering the market and sharing a growing customer base. But what happens to the customers when an energy provider becomes insolvent?

Brent crude’s 18-month slide from above $110bbl to a January 2016 low of under $30bbl led to a number of high-profile North Sea upstream restructurings. This article considers what we can learn from recent cases and how they can inform the approach of companies, lenders, bondholders and restructuring professionals in future cases in the sector.

JWS has achieved a significant win on behalf of Linc’s liquidators, PPB Advisory, in their proceedings against the Queensland State Government in relation to Linc’s environmental liabilities. The Queensland Court of Appeal has unanimously overturned the Supreme Court judgment of Jackson J, which was the subject of an appeal hearing in September 2017 at which Bret Walker SC appeared for the liquidators.