Following proposals Treasury made at the end of 2009, it has now published for consultation draft regulations setting up a special resolution regime for investment banks. The regime will apply to firms that meet all of the following three conditions:

The demise of Connaught's social housing maintenance business will have left a great deal of its local authority clients wondering what happens next when you need services to be undertaken and cannot afford to wait for the contractor's administration to pan out. Such clients need to be aware of what they can do in this situation under the contract. First, do some homework: who else is there in the marketplace? Is there a potential buyer of the insolvent firm's business and will any such purchase include the contract that it has with you?

On 17 September, the Pension Regulator's Determinations Panel announced that it had issued a determination that six companies within the Lehman Brothers group (including the group's main operating companies in the UK as well as the US parent Lehman Brothers Holding Inc.) should provide financial support to the Lehman Brothers Pension Scheme. This followed a hearing on 8-9 September 2010.

Insolvency procedures involving companies are complex and generally take a long time to complete. There is plenty of jargon which adds to the confusion, whereas all that an unsecured creditor usually wants to know is how to make a claim for the monies owed to him by the company, to whom the claim should be made, how long it will take to decide the claim and whether there is a possibility of recovering any monies from a company which is obviously experiencing financial difficulties.

The High Court has in the past month ruled on two challenges to company voluntary arrangements (CVAs) on the grounds of unfair prejudice and material irregularity,  reaching a different conclusion in each case. 

Introduction

The Pensions Regulator (TPR) has issued a statement on Regulated Apportionment Arrangements (RAAs) and employer insolvency.

Employers of multi-employer schemes can use a number of mechanisms under the Employer Debt Regulations 2005 to manage a debt triggered under section 75 of the Pensions Act 1995. Broadly, RAAs can be used in situations where a scheme has entered into a Pension Protection Fund (PPF) assessment period, or is likely to enter into such an assessment period. TPR must approve an RAA.

The case of Bulbinder Singh Sandhu (trading as Isher Fashions UK) v Jet Star Retail Limited (trading as Mark One) (in administration) highlights that care needs to be taken to ensure that Retention of Title (RoT) clauses are effective. More information on ROT clauses is available in our 'Litigation survival guide - part 3. Retention of title: sellers beware!'

The facts

A party cannot appeal a decision made in bankruptcy proceedings by reason only of a personal interest in the outcome. An economic interest is a pre-requisite.

This was confirmed by the court in Sands and another v Monem and another, in which the bankrupt had transferred the interest in his home to his wife before being made bankrupt. The transfer was made allegedly in order to settle a debt, although this was not reflected in the documentation. That transfer was successfully set aside as a preference by the bankrupt's trustee.

The Insolvency Service recently opened a consultation (the "Consultation") on its proposals for a restructuring moratorium. Under the proposals, eligible companies satisfying certain qualifying conditions would be able to apply to court for a moratorium to prevent creditor action (a "Moratorium"). The Moratorium is not intended to be an alternative to formal insolvency for companies that are already insolvent but is intended to support viable companies reach a compromise with their creditors.