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.

A review of Diana Loson v (1) Brett Stack (2) Newlyn PLC [2018] EWCA Civ 803

Facts

In this case a judgment debtor appealed against a decision in which her application to pay a judgment debt by instalments was refused.

Do controlled goods agreements (“CGA”s) create security which a creditor can rely on against an insolvent debtor?

CGAs are relatively new instruments which have replaced the practice of walking possession agreements.  A CGA is defined under paragraph 13(4) of Schedule 12 of The Taking Control of Goods Regulations 2013 as “an agreement under which the debtor -:

(a)     is permitted to retain custody of the goods,

There are few areas of insolvency law more fraught with pitfalls than the insolvency of unincorporated charities, in particular charitable trusts. From the preliminary and decision-making stages to the actual liquidation of the charity’s assets, it can pose unique challenges about which trustees and Insolvency Practitioners (IPs) must be aware.

Statutory demands are a key asset in a lender’s arsenal when seeking to enforce under a guarantee. The mere threat of bankruptcy is often a powerful method of brining a reticent debtor to the table. Above all else, they are quick, simply and relatively inexpensive to present, often avoiding the need to bring proceedings against the debtor in court.