Introduction

The UNCITRAL Model Law on the Recognition and Enforcement of Insolvency Related Judgments (‘the New Model Law’) is intended to fill the gaps that currently exist in cross-border conventions as they apply to the recognition and enforcement of judgments in insolvency proceedings.

Judgment was handed down in the High Court this morning, in a case where recognition of a winding-up of a solvent foreign investment fund was granted under the Cross-Border Insolvency Regulations 2006 ("CBIR").

This is the first time that the English Court has examined in detail the UNCITRAL Model Law on insolvency and the interplay with its Guides to Enactment, as well as case law from various jurisdictions concerning its application to solvent scenarios. Mrs Justice Falk found that:

The below is a quick snapshot of three recent tax-related developments in the insolvency and restructuring sphere.

Farnborough – appointment of a receiver and tax grouping

The Court of Session found that an insurer had not waived disclosure under the Insurance Act 2015 (“the Act”). The case is the first to be decided under the Act.

Background

A fire occurred at Mr Young’s property (“the Property”) causing extensive damage. Mr Young then claimed an indemnity from his insurers, Royal and Sun Alliance PLC (“RSA”).   

The recent case of Re J T Frith Ltd [2012] EWHC 196 (Ch) shows:

• how secured lenders may surrender their security in order to participate in the prescribed part available for unsecured creditors on insolvency; and
• how intercreditor deeds may be worded to allow senior secured creditors to participate in the prescribed part, despite retaining their security.

Background

RUBIN V EUROFINANCE SA

New Cap Re v Grant  

[2012] UKSC 46

Practitioners should be aware that recent comment from a number of the insolvency judges at the Court of Session suggests that the Court is likely to be taking a more interventionist approach to a number of insolvency applications and, as a result, practitioners may wish to review the approach taken to these applications in administration and liquidation cases.

Summary

The High Court has held in the “Extended Liens” application that a “general lien” granted by a client of Lehman Brothers International (Europe) (“LBIE”) over financial collateral held by LBIE as security for obligations owed by the client to LBIE or any other Lehman entity was a valid floating charge, both in relation to the client’s debts to LBIE and its debts to LBIE’s affiliates.

Lazari GP Ltd v Jervis

When a company goes into administration, it benefits from a "moratorium" that prevents creditors taking legal and other proceedings against the company or its assets.   The main purpose of the moratorium is to free an administrator's rescue attempts from the distractions of legal action from creditors. 

A problem frequently faced by landlords in the current economic climate is that of tenants who time their entry into administration so that it takes place just after rent payable in advance on a quarter day has fallen due. This growing practice has left landlords frustrated and out of pocket.