Introduction

Against the backdrop of the recent sheriff court decisions regarding the need to appoint a Court Reporter even in cases where the assets are insufficient to meet the IPs' fees, the Court of Session has taken an innovative approach to approving IP fees without the need to appoint a court reporter.

Background

The High Court has struck down a company voluntary arrangement on the ground that it unfairly prejudiced a landlord who was to lose the benefit of a guarantee given by the tenant’s parent company. The judge said it was “unreasonable and unfair in principle” to require the landlord to give up the guarantee and there was “no sufficient justification” for requiring the landlord to accept a sum of money in lieu.

On 26 July 2010, the Insolvency Service issued proposals for a new type of short-term restructuring moratorium. The moratorium would be available through a court-based process to companies with a viable business and the general support of creditors. The proposed moratorium could have the potential to encourage more companies to view the UK as an attractive jurisdiction for restructuring.

What are the proposals?

The main features are:

When a company goes into administration, time does not stop running against its creditors' claims for the purposes of the Limitation Act 1980. This is different to where a company goes into liquidation as time does then stop running. The effect there is that the claim stays live whereas in an administration, once the limitation period has expired, the claim is time-barred.

The Limitation Act 1980 prescribes various periods of time in which a claim must be brought. In the event that this is not undertaken within the specified period, the cause of action will be statute barred and as such unenforceable.

In the case of a simple contract, the period is six years and in general begins to run from the date on which the cause of action accrued. In order to 'stop the clock', proceedings (a claim) will have to be brought.

Knowing how much money you owe and are owed is critical when considering disputes with other parties. You need to consider whether a right of set-off exists between you and the other party.

In the continuing uncertainty of the current economic climate, and with a tough financial regime introduced by the new government, landlords may still find themselves faced with an insolvent tenant.

The demise of Connaught's social housing maintenance business will have left a great deal of its local authority clients wondering what happens next when you need services to be undertaken and cannot afford to wait for the contractor's administration to pan out. Such clients need to be aware of what they can do in this situation under the contract. First, do some homework: who else is there in the marketplace? Is there a potential buyer of the insolvent firm's business and will any such purchase include the contract that it has with you?

Introduction

Case considering whether rent which accrued during an administration was payable in full as an expense of the administration or whether payment was a matter of discretion for the court.