On 7 February 2019, my article entitled “No deal Brexit – impact on insolvency” was published on Lexology. That article was published shortly after the Insolvency (Amendment) (EU Exit) Regulations 2019 (the “2019 Regulations”) were made.

On 13 September 2018 the Government issued guidance relating to civil legal cases and insolvency cases where there was a ‘no deal’ scenario: ‘Handling civil legal cases that involve EU countries if there’s no Brexit deal’ (I shall refer to this as the “Notice” in this article).

Regulation (EU) 2015/848 (the “Insolvency Regulation”) states at Recital 23 of its preamble that main insolvency proceedings can be opened in a Member State where a debtor has its centre of main interests (“COMI”). It goes on to state that those proceedings have universal scope and are aimed at encompassing all of the debtor’s assets. The Insolvency Regulation further details  at Article 3(1) that a debtor’s COMI is where the debtor conducts the administration of its interests on a regular basis which is ascertainable by third parties.

We are increasingly being asked to advise non EU resident nationals, with cross jurisdictional lives, who wish to take advantage of the IVA regime in England & Wales.  A fairly standard scenario we see is this:

Executive Summary 

The recent case of Dingley and others v Nisa Retail Ltd (Re MKG Convenience Ltd (in liquidation)) [2019] EWHC 1383 (Ch) demonstrates three interesting facets of section 127 of the Insolvency Act 1986:  

1 That it is still very difficult to avoid the implications of S127 in relation to any disposition, whether by payment from a bank account, transfer of assets or other transactions such as the issue of credit notes with a validation order;

2 that direct debts are not excluded in any way; and

Reliance Wholesale Ltd v AM2PM Feltham Ltd [2019]

In the recent case of Reliance Wholesale Ltd v AM2PM Feltham Ltd, the High Court provided some much needed guidance and clarification as to how the Court should approach the issues of costs

when a petition debt is dismissed following a payment in full being made by the debtor company, even when such a payment is made ‘under protest’ with no admission of liability as to the petition debt.

Background

EMI Group Ltd -v- O&H Q1 Ltd [2016 EWHC 529 (Ch)is the latest case in the saga following the 2011 decision in K/S Victoria St. v House of Fraser, relating to lease assignments and guarantors of “new tenancies” (generally meaning leases entered in to on or after 1 January 1996).

On 6 February 2019 the Court of Appeal gave its decision dismissing Sequana’s appeal against a decision of the High Court in 2016, that payment of a dividend by a company can be susceptible to challenge under section 423 Insolvency Act 1986 (IA86).

Background

Trustees should be careful when disclaiming assets after bankruptcy, after a High Court ruling blocked an application on a property that turned a significant profit when sold.

The case in question is Sleight v The Crown Estate Commissioners [2018] EWHC 3489 (ch).

The facts 

The Applicant in Sleight was the trustee in bankruptcy (the Applicant). The Respondents were The Crown Estate Commissioners (the Respondents).

A winding up petition is a petition to bring the life of a company to an end. From the point of view of a creditor (person/company to whom money is owed), commencing winding up proceedings should be regarded as a last resort.

Under section 122 Insolvency Act 1986 (“IA 1986”), there are certain prescribed circumstances in which a winding up petition can be filed with the court. One of those prescribed circumstances is when a company is unable to pay debts in excess of £750.