Creditors' Bankruptcy Petition

The rules for these petitions are contained in 10.6 to 10.33. This section also covers IVA supervisors making a petition. The good news is that under the new Rules, there are very few changes to the current procedure.

On 6 April 2017, together with the new Insolvency Rules (England and Wales) 2016, the Investment Bank (Amendment of Definition) and Special Administration (Amendment) Regulations 2017 (the “Regulations”) will come into force.

These regulations follow an independent review of the special administration regime, undertaken by Peter Bloxham during 2013, assessing the success of the special administration regime and making recommendations of possible changes that may improve the operation and robustness of the regime.

The recent spate of high-profile company voluntary arrangements (CVAs), including those of BHS, Store 21 and more recently Love Coffee, The Food Retailer Group and Blue Inc, has placed this corporate rescue tool back in the spotlight.

CVAs can be a useful mechanism for turning around a failing business, but it is clear that they are no panacea. First, they don’t always work, and BHS is a striking example of a CVA failing to save a business despite compromising a large number of leasehold liabilities.

Changes to the Insolvency Act 1986 ("Act")

SBEEA 2015 makes a host of supplemental amendments to the Act, the general effect of which is remove references to creditors' meetings and replace them with the alternative decision processes.

As a consequence:

Privilege and insolvency

A recent Court of Appeal decision means insolvency practitioners should think twice before instructing solicitors. The case confirmed that whilst there is nothing wrong in principle with solicitors acting for both a trustee in bankruptcy or liquidator and a creditor of the bankrupt or insolvent company, conflicts can arise. Where they do, solicitors may be required to cease acting for the creditor.

This case arose from an underlying claim by a company called Mploy against Denso, which resulted in an adverse costs order against Mploy.

The Court of Appeal, in the case of Harvey v Dunbar Assets plc [2017] EWCA Civ 6, has held that it constitutes an abuse of process for a debtor to seek to set aside a second statutory demand on the basis of an argument previously raised and dismissed by the Court on its merits.

The background

In Fielding v The Burnden Group Limited (BGL) the English High Court dismissed an application for the liquidator to be held personally liable for the costs of a successful appeal against the rejection of a proof of debt.

Care providers in the UK are under considerable financial strain. Costs of care continue to rise. The fees from local authorities have failed to keep pace with the actual cost of delivering care despite the growing demand for care and for such care to meet the expected fundamental standards. It is therefore not surprising that some care providers are buckling under the strain. What should the directors of a provider do if the provider is buckling under the strain?

In the UK case of CFL Finance Limited v Rubin and Ors, a creditor had sought to make an individual bankrupt. A creditors' meeting was held.  At the meeting, a proposal for an Individual Voluntary Arrangement was approved by the creditor that held the largest portion of debt (and therefore 90.43% of the vote).  The other two creditors voted against the proposal.