The High Court has decided that financial support directions can be issued against insolvent companies as well as solvent ones.
The administrators of 20 insolvent companies in the Lehman Brothers and Nortel groups had argued that the Pensions Regulator’s Determinations Panel had no legal power to determine that it would be reasonable to issue FSDs against these companies. The High Court disagreed and decided:
Since 2003, the procedure for appointing administrators has largely consisted of filing simple forms with a court. What could be easier? A recent case has, however, highlighted the dangers of making errors in the filing process and serves as a timely warning to everyone involved in insolvency and security enforcement work.
In Kaupthing Capital Partners II Master LP Inc, the English courts ruled that an appointment of administrators was invalid as the incorrect form had been used for the appointment.
A late-October 2010 case on adjudication illustrates the courts' approach to technical and insolvency-based challenges regarding enforcement of adjudicators' awards.
Haymills (Contractors) Ltd went into administration in August 2009 having already won one adjudication against its employer, Shaftsbury, and having just commenced another, which it subsequently also won. Given Haymills' administration, Shaftsbury refused to pay the amounts awarded in either adjudication, relying on numerous heads to resist payment:
The implications of taking an appointment over an insolvent business which is regulated by environmental law can be far reaching. Environmental regulation has become more stringent and the sanctions for breach can leave the IP exposed to liability, including (amongst other things) costs sanctions.
The main environmental regimes referred to in this update are the contaminated land and water pollution regimes.
The court has held that a statutory demand is valid despite the high default interest rate on an underlying loan.
On 16 September 2010 the UK Treasury published a consultation paper seeking views on its proposals for a new Special Administration Regime (SAR) for investment firms. The Consultation included draft regulations that will implement the SAR (the Draft Regulations).
The Consultation was prompted by the failure of Lehman Brothers in 2008 which posed (and continues to pose) serious challenges for insolvency regimes around the world.
On 7 September 2010 "property and environmental services giant" Connaught, which had large contracts with many local authorities for maintenance of social housing, went into administration. In the wave of publicity which followed, the administrator quickly announced that it had "sold" the "majority of the ongoing contracts and their related assets" to Lovell, a subsidiary of Morgan Sindall. Since then, announcements have been few and far between.
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.
The cuts revealed in the Comprehensive Spending Review have not been quite as bad as the construction industry had apparently been expecting (£3.5 billion not as bad). Nevertheless there have still been billions of pounds shaved off various departmental budgets which will affect the construction industry. Where public spending has in the past been a reliable source of income, some companies are inevitably now going to feel the effect of the cuts.
Introduction
Against the backdrop of the recent sheriff court decisions regarding the need to appoint a Court Reporter even in cases where the assets are insufficient to meet the IPs' fees, the Court of Session has taken an innovative approach to approving IP fees without the need to appoint a court reporter.
Background