The case held that a judge was right to strike out a claim brought by a liquidator under sections 238 and 241 of the Insolvency Act 1986, as the transactions alleged to have been made at an undervalue were not transactions entered into by the company.

Comment

An administrators’ appointment automatically ends after one year, unless steps are taken to extend it. The Enterprise Act introduced a new streamlined process for moving quickly and easily from administration to creditors’ voluntary liquidation, just by filing a notice at Companies House under para 83(3) Sch B1 of the Insolvency Act (IA)1986. Problems have arisen where that notice has been filed very late in the day and not received before the administrators’ term of office automatically ends.

Background

The much awaited court decision on the status of Financial Support Directions (“FSDs”) and Contribution Notices (“CNs”) * issued by the Pensions Regulator against target companies after the commencement of English insolvency processes in respect of such targets was handed down by the court on Friday 10 December 2010. The reluctant decision of Mr Justice Briggs that FSDs and CNs in these circumstances were not provable debts but ranked as expenses of the insolvency process, taking precedence ahead of unsecured creditors, has caused dismay in the restructuring community.

The summer months are upon us, and developments in insolvency law and practice continue apace. Since our Spring issue the courts have pronounced in a number of interesting cases. At the time of writing, the World Cup is underway – it would perhaps be remiss not to have some football flavour in this article, and so some observations on the plight of Portsmouth FC are appropriate (though saved till the end).

Successive notices of intention to appoint administrators: more than one moratorium?

THE PERENNIAL PROBLEM OF UNPAID DEBTS – YOUR RECOVERY OPTIONS

One of the significant changes to distributions in insolvency made by the Enterprise Act 2002 was the abolition of the preferential status of debts owed to the Crown and the introduction of a provision for the creation of a ‘ring-fenced fund’ (also known as the “prescribed part”, an amount currently capped at £600,000) from the proceeds of floating charges created after 15 September 2003 to be applied in distribution to unsecured creditors.

On 1 April 2008 The Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (Regulations) came into force. The Regulations extend the exclusion from the obligation to pay rates in respect of unoccupied non-domestic rates to those premises where the owner (or lessee, being a person entitled to possession) is a company in administration pursuant to Schedule B1 Insolvency Act 1986 or is subject to an administration order under the former administration provisions.

At the end of 2006 a decision of the Court of Appeal in Churchill v First Independent Factors and Finance Limited (Churchill) caused consternation among those involved in the management of insolvent companies who are also involved in the management of the company that acquires the whole or a substantial part of the insolvent business.

Re Powerhouse Limited: Prudential Assurance Company Limited v PRG Powerhouse Limited [2007] EWHC 1002 Ch Guarantees are widely used in commercial transactions to provide assurance to creditors that debts or other obligations owed to them are discharged fully in the event the principal debtor fails to perform. This assurance was shaken by the steps taken in early 2006 by PRG Powerhouse Limited (Powerhouse) to enter into a company voluntary arrangement (CVA) that contained proposals to release certain parent company guarantees given to landlords of premises being vacated by Powerhouse.