The joint liquidators of a company, which had been compulsorily wound up in England and Wales, sought orders under section 236 of the Insolvency Act 1986 (“IA86”) for production of documents and an account of dealings with the company, in respect of companies in Italy. The question for the Court was whether s236 IA86 had extraterritorial effect. The problem for the court was that there was competing first instance decisions both for and against.

The recent Court of Appeal judgment in the case of Ezair v Conn [2020] EWCA Civ 687, handed down on 1 June 2020, has reiterated that section 234 of the Insolvency Act 1986 (“IA 1986”) provides only a summary procedure to assist insolvency office-holders in the exercise of their statutory duties. The Court made clear that section 234 IA 1986 does not provide scope for the determination of complex legal issues relating to the property in question.

The Government on 20 May 2020 published the Corporate Insolvency and Governance Bill, which contains the most far-reaching reforms to UK insolvency law in over 30 years. The Bill has been introduced on an emergency basis in an attempt to ensure that otherwise financially viable companies survive during a period of unprecedented interruption and turmoil.

In his judgment handed down on 7 May 2020 in the case of Gregory v ARG (Mansfield) Ltd [2020] EWHC 1133 (Ch), HH Judge Davis-White QC, sitting as a Judge of the High Court, commented (on an obiter basis) that where a company regulated by the Financial Conduct Authority (the “FCA”) seeks to enter administration, section 362A of the Financial Services and Markets Act 2000 (“FSMA 2000”) and paragraph 29 of Schedule B1 of the Insolvency Act 1986 (the “Insolvency Act”), require that writ

Long awaited insolvency reforms in the UK, plus the government’s COVID-19 proposals on the use of statutory demands – and much more

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In Arlington Infrastructure Ltd (In administration) and another v Woolrych and others [2020] EWHC 3123 (Ch), the Court considered the meaning of a deed of priority entered into between the senior and junior secured creditors of Arlington Infrastructure Limited (AIL). The junior creditors (but not the senior creditor) also held debentures over AIL's subsidiary companies.

One of the temporary measures that was not extended was the disapplication of the wrongful trading rules of section 214 of the Insolvency Act 1986 as regards the personal liability of company directors. The discontinuation of the temporary protection has been criticised by business and most recently by the Institute of Directors (IoD) which commented that "Failing to extend the suspension of wrongful trading rules was a mistake. Without this protection, the pressure is on directors to simply shut up shop when faced with difficulty". Is that concern justified?

OVERVIEW

This article was first published in International Corporate Rescue by Chase Cambria

This article was first published in International Corporate Rescue.

The recent English decision in the Australian liquidation, New Cap Reinsurance Corpn Ltd (in liquidation) and another v Grant and others (available here), has further opened up the possibility for New Zealand insolvency proceedings to be recognised and enforced in the United Kingdom.