Insolvent Defendants
Corporate Insolvency
Dissolution
1. Corporate bodies (limited companies or LLPs) have a separate legal identity that ceases to exist upon dissolution. Dissolution can occur, broadly speaking, in two ways, one is at the end of the process of winding up (whether voluntary or compulsory) and the other is by the process of striking off the Register of Companies
or limited liability partnerships. The latter occurs either as a result of the company’s
21 January 2014
[2014] EWCA Civ 26
Court of Appeal (Arden, Sullivan and Davis LJJ)
Following suspension of IVAs, all creditors were bound by varied IVAs approved at a further creditors' meeting directed by the court, even if they had become creditors after the initial suspension.
London & Westcountry Estates Limited ("LWE") went into administration in March 2012. The directors of LWE claimed that its bankers had mis-sold an interest rate swap product to them, and that they were, as a result, entitled to compensation. As LWE was in administration, it was for the administrators to bring the claim against the bankers. The administrators, however, declined to bring an action on behalf of LWE, and also declined to assign the cause of action to the directors.
One of the recent hot topics in the European restructuring market has been whether the UK Courts would sanction a scheme of arrangement in relation to a foreign company, with no previous connection to the UK whatsoever, where the sole basis for establishing jurisdiction to undertake the scheme would be amending the governing law and jurisdiction clauses of the company’s principal finance documents to English law.
In Bailey & Others (Joint Liquidators of D&D Wines International Limited) v Angove’s Pty Limited1, the Court of Appeal overturned a decision of the High Court, and so permitted the liquidator of an insolvent agent to recover funds due to it from end-customers despite the agency having been terminated.
Background
Key points
- Section 306 of the Insolvency Act 1986 (“1986 Act”) provides that a bankrupt’s estate shall vest immediately in the trustee in bankruptcy and no registration is required to effect that vesting;
- A bankrupt’s tenancy had vested in the trustee so that the bankrupt was no longer the qualifying tenant for the purposes of enfranchisement under the Leasehold Reform Act 1967 (“1967 Act”).
The facts
This case considered whether Bulmers Transport Limited (“Bulmers”) was under the “supervision of an insolvency practitioner” pursuant to Regulation 8(7) Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).
Comment
The case provides some helpful clarity on the inter-relationship of Regulation 8(7) TUPE and s388 Insolvency Act 1986, when determining whether a company is under the “supervision of an insolvency practitioner”.
In the case of B v IB [2013] EWHC 3755 (Fam) the High Court has determined the status of an application made under s.423 of the Insolvency Act 1986 issued during divorce proceedings where the husband had died during the process and the wife intended to commence new proceedings under s.10 of the Inheritance (Provision for Family and Dependants) Act 1975.
Background
When a creditor to a company believes that that company is insolvent, it is open to that creditor to present a Petition for the compulsory liquidation of that company. Section 135(1) of the Insolvency Act 1986 allows the creditor, on submitting a Petition for the winding up of a company, to apply for a provisional liquidator to be appointed.