Summary
The Insolvency Service has released its report on CVAs (the “Report”), which was commissioned in response to the significant concerns raised by the commercial property sector in recent years and the legal challenges launched by landlords against a number of CVAs.
Changtel Solutions UK Ltd (In Liquidation) and others v G4S Secure Solutions (UK) Ltd [2022] EWHC 694 (Ch)1
Section 127(1) Insolvency Act 1986 (“IA 1986”) provides that: "In a winding-up by the court, any disposition of the company’s property, and any transfer of shares, or alteration in the status of the company’s members, made after the commencement of the winding-up is, unless the court otherwise orders, void."
In Stephen John Hunt (Liquidator of Marylebone Warwick Balfour Management Ltd) v Richard Balfour-Lynn and others [2022] EWHC 784 (Ch), the High Court decided that the directors of a company which went into liquidation after participating in an ineffective tax avoidance scheme did not breach their fiduciary duties and payments made pursuant to the scheme were not transactions defrauding creditors.
Background
Claims against directors for unsuccessful tax avoidance schemes when their company enters into insolvency is not a new phenomenon, but a very recent case introduces a new potential defence for directors, as our Insolvency and Corporate Recovery specialist Tony Sampson explains.
Why would HMRC challenge a scheme?
HERBERT SMITH FREEHILLS
Pension Disputes Bulletin
Welcome to the latest edition of our regular pension disputes bulletin. In these bulletins we report on key cases, Ombudsman decisions and regulatory activity and we highlight emerging risks for pension schemes, providers, sponsors, administrators and other service providers.
In a hurry? In a hurry? Read the `Risk warning', `Takeaways' and `Comment' boxes to find out the key risks, points to note and to read our observations on each case/ development.
MAY 2022
The recent company insolvency statistics for Q1 2022 show the number of company insolvencies is continuing to increase. The figures show creditors’ voluntary liquidations as being the most common procedure followed by compulsory liquidations – the number of which is more than twice as high as in the previous quarter, although still below pre-pandemic levels.
The High Court has allowed an application for an order to enable access to a bankrupt’s pension to satisfy debts arising from fraud. Prior to the bankruptcy, judgment was obtained against him for £3.2m plus costs.
An analysis of the UK’s corporate rescue tools: The Company Voluntary Arrangement, the Scheme of Arrangement and the Restructuring Plan.
When it comes to options for the rescue of a distressed UK corporate, there had for a very long time been a growing mood of regret amongst practitioners that there was no comprehensive restructuring tool. That all changed with the introduction of the Restructuring Plan (RP).
But, as with all things new, the evitable question is: what happens to the old?
A director has been found liable in the High Court for fraudulent trading as a result of failing to carry out proper due diligence in a series of transactions which were found to be part of a VAT fraud scheme.
The claim was brought against the director by the Liquidator of JD Group Limited (the “Company”).
Background
Over recent months we have seen numerous references in the press to investigations into Bounce Back Loan Scheme (BBLS) fraud. A year ago the National Audit Office estimated that around 11% of the loans granted (some £4.9bn) were procured fraudulently. More recent official estimates suggest the figure is between £3.3bn and £5bn.
Needless to say attempting to recover these funds is a enormous task. The National Crime Agency is investigating some of the biggest cases, but equally banks and HMRC are actively seeking to identify fraud and recover the loans.