The Third Parties (Rights Against Insurers) Bill proposes that claimants should be able to sue the insolvent defendant’s insurer directly without having to sue the wrongdoer first. This changes the current legislation, passed in 1930, that requires claimants to establish the wrongdoer’s liability before bringing a separate claim against their insurer.
The statutory moratorium may not protect a company in administration against proceedings continuing under the Landlord and Tenant Act 1954
Property professionals will no doubt be familiar with the statutory moratorium that comes into effect immediately upon an administration order being made in respect of a company. The main effect of this is that no legal process may be started or continued against the company or property of the company except with the consent of the administrator or with the permission of the court.
The background
In a judgment issued on 15 December in the English High Court (Lehman Brothers International (Europe)(in administration) v CRC Credit Fund Limited & Ors [2009] EWHC 3228), and based on assumed facts presented to him, Mr Justice Briggs described the failure by LBIE to protect client monies from the impact of insolvency as "truly spectacular" and involving "shocking underperformance".
We have spent a lot of time thinking about landlords being affected by tenants going into administration over the last year. This posting is about a court case where the landlord’s administrators were trying to postpone the tenant’s application to Court for the grant of a new tenancy under the 1954 Act.
The administrators failed in their attempts to defer the 1954 Act proceedings even though it severely affected the value of the property in question and the amount that was going to be paid out to the secured creditor.
The Insolvency Service (IS) has published a consultation paper on reforming debtor petition bankruptcy and early discharge from bankruptcy. The proposed reforms, which are aimed at speeding up the procedure and lowering costs, are to:
Where "prejudice" is suffered by a creditor or contributory, the court can order a compulsory liquidation despite a voluntary liquidation having already been entered into.
In these uncertain economic times, sellers often find themselves concerned about receiving payment for goods sold. More and more businesses are suffering cash flow problems often as a result of their own customers becoming insolvent. Demanding payment up front is simply not a commercial reality for most businesses. Businesses can find themselves living in fear of one of their larger purchasers reneging on payment due to a lack of cash flow or insolvency. The knock-on effects of such an occurrence may be devastating to the seller.
On 9 November, the PPF published proposals for the 2011/12 pension protection levy year which aim to improve the way the insolvency risk for sponsoring employers is assessed. The proposals reflect industry feedback and a review of methodology and insolvency probabilities carried out by Dun & Bradstreet (D&B).
The key changes include:
Following concerns expressed by the Insolvency Service and reports showing that corporate insolvency costs are higher in the UK than other European countries, the Office of Fair Trading (“OFT”) has announced that it will conduct a market study into the UK corporate insolvency market. The study will also look into the process for appointing insolvency practitioners. The OFT will be contacting key players in the market directly, and other interested parties are invited to make submissions.
Market studies