In the Matter of Bell Lines Limited (In Liquidation)
That decision has effectively been relied on since 2006 for the proposition that, except for the Social Insurance Fund, a party advancing monies for the payment of remuneration falling due before the commencement of an insolvency process but actually paid after such commencement is not entitled to subrogate to the employees’ preferential claims.
The Appeal
In Gulf International Bank v Al Ittefaq Steel Products Co and others [2010] EWHC 2601 (QB), the High Court set out the factors that must be taken into account by the court when exercising its discretion to extend time for payment of sums due following an admission.
According to a recent judgment in the English High Court, Financial Support Directions ("FSDs") issued by the Pensions Regulator ("the Regulator") against companies in administration are to be treated as expenses of the administration. This means that they are to rank ahead of preferential and unsecured creditors and, indeed, perhaps ahead of the remuneration of the administrators themselves.
If you were waiting to hear what the English Court of Appeal had to say about the lower court decision in Marine Trade S.A. v. Pioneer Freight Futures Co. Ltd. you’ll be disappointed, as the appeal was dismissed by consent of the parties on October 22, 2010.
The High Court has struck down a company voluntary arrangement on the ground that it unfairly prejudiced a landlord who was to lose the benefit of a guarantee given by the tenant’s parent company. The judge said it was “unreasonable and unfair in principle” to require the landlord to give up the guarantee and there was “no sufficient justification” for requiring the landlord to accept a sum of money in lieu.
By a judgment handed down on 26 October 2010 in Sugar Hut Group Ltd & Ors v Great Lakes Reinsurance (UK) Plc & Ors [2010] EWHC 2636 (Comm), Mr Justice Burton in the Commercial Court held that insurers were entitled to avoid, for a material non-disclosure of a corporate re-organisation, a policy which could otherwise have covered losses arising from a fire at the premises of the insureds.
The underlying policy of the Insolvency Act 1986 is that all assets of an insolvent organisation must be made available for distribution amongst its creditors. However, the courts also have the power to prevent parties from contracting out of the statutory regime. This long established common law principle known as the anti-deprivation principle has been used by the courts over the years to strike down contractual provisions which attempt to do just that. The principle has received an airing in two recent High Court decisions.
Introduction
Background
The recent descision of BNY v Eurosail1 is an important modern descision on the blance sheet test for insolvency.