Europe, the U.S. and Canada—On 7 May 2013, the US Bankruptcy Court for the District of Delaware denied a motion by European creditors of Nortel Networks Corp. ("Nortel") to certify a direct appeal to the U.S. Court of Appeals for the Third Circuit of the bankruptcy court's 3 April 2013 ruling (Inre Nortel Networks, Inc., Case No. 09-10138 (KG), 2013 BL 92666 (Bankr. D. Del. Apr.

Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 27 countries that comprise the European Union as well as the collective viability of euro-zone economies. Here we provide a snapshot of some recent developments relating to insolvency and restructuring in the EU.

Administrations, including "pre-packs", are not capable of constituting "insolvency proceedings...instituted with a view to the liquidation of the assets of the transferor" within the meaning of Regulation 8(7) of TUPE. Where there is a sale of an undertaking by an administrator, the employees assigned to the undertaking will automatically transfer to the buyer and receive unfair dismissal protection.

Key facts

We note with interest the Government's Discussion Paper, 'Transparency & Trust: Enhancing The Transparency of UK Company Ownership And Increasing Trust in UK Business', published yesterday.

In the Paper, the Government proposes to (amongst other things):

A recent High Court case involving unlawful loans to directors illustrates the potential pitfalls involved in calculating limitation periods, and the circumstances in which the usual six year statutory limitation period will not apply to a recovery claim against a fiduciary.

Facts

Broadside Colours and Chemicals Ltd was a family firm supplying dyes to the textile trade. The directors were Geoffrey Button, his wife Catherine Button, and their son James Button. Only the father and son were shareholders.

In BNY Corporate Trustee Service v Eurosail UK1, the Court of Appeal rejected a “mechanical” definition of balance sheet insolvency.

In Griffi n v UHY Hacker Young & Partners1 the court dismissed an application for summary judgment on the basis of the ex turpi causa (or illegality) defence, and made a number of observations as to uncertainties in the law as it stands.

In the present fi nancial climate, customers are increasingly asking for business critical software or other assets to be transferred to the customer should the supplier become insolvent, for the legitimate reason that the customer needs security of supply. Two recent Court of Appeal cases remind us that customers who outsource to and contract with potentially vulnerable service providers need to take account of the “anti-deprivation principle” when doing this.

The Third Parties (Rights against Insurers) Act 2010 received Royal Assent on 25 March 2010. The Act modernises the Third Parties (Rights against Insurers) Act 1930 by streamlining the procedure by which a third party claimant can recover compensation from the insurer of a defendant.

The draft Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2009 has now been published detailing the proposed changes to the Insolvency Act 1986. The aim of the changes is to reduce costs and the administrative burden on users of the legislation and subsequently benefi t the creditors of insolvent companies and individuals through more fl exible procedures and increased dividends.