Pre-2006, it was always clear that TUPE applied to transfer employees working in a business when it was bought out of administration. However, changes in 2006 provided that the automatic transfer principle would not apply to any transfer of a business or undertaking where the transferor was the subject of bankruptcy proceedings, which had been 'instituted with a view to the liquidation of the assets of the transferor'.

The threat of insolvency proceedings against a corporate debtor can greatly assist a creditor's primary objective of getting paid, preferably in advance of everyone else. This is particularly so where the debtor is prevaricating but there is no genuine dispute that the sum in question is due and owing. Although the courts decry the use of the winding-up procedure as a means of debt collection, it is often a very effective tool.

Consider the following when faced with a corporate debtor who is refusing, without genuine reason, to settle its debts:

The Employment Appeal Tribunal (EAT) has held, in Da Silva Junior v Composite Mouldings and Design Limited, that continuity of employment was preserved where an employee of a company in voluntary liquidation was subsequently employed by a company with the same majority shareholder.

The insolvency legislation has laid the foundations for a rescue approach towards companies, which are facing insolvency. One such regime is administration. The administrator is sometimes referred to as the "company doctor". The administrator is given extensive powers to administer the affairs of the company in order to save the company from being wound up or at least, to maximise the financial position for the company's creditors.

In Oakland v Wellswood (Yorkshire) Ltd, the Employment Appeals Tribunal (EAT) decided that an employee of a business in administration was unable to have the protection afforded to employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) when the business in which he was employed was transferred and continued as a going concern with the transferee.

This memorandum provides an overview of the practical issues facing a sub-participant under a Loan Market Association ("LMA") English-law governed sub-participation agreement as the creditworthiness of grantor deteriorates.

Introduction

The filing on 15 September 2008 for Chapter 11 protection under US bankruptcy laws by the Lehman Brothers ultimate parent company, Lehman Brothers Holdings Inc., led to several UK-based entities of the Lehman Group entering administration.

So long as there is no evidence of willful default or lack of reasonable diligence, failure to submit a claim form in time in relation to a CVA may not be fatal.

In Bridge Trustees Limited v Noel Penny, Judge Purle QC, sitting as an additional Judge of the High Court, held that the Court could use its inherent jurisdiction to permit an independent trustee to distribute surplus in a scheme that was winding-up. Under the Pensions Act 1995, an independent trustee is appointed to exercise powers otherwise conferred on the employer where an insolvency practitioner begins to act in relation to a company.

A business you are buying or selling, if reorganised for sale, may be less valuable if you do not avoid tax pitfalls. This note highlights the most common pitfalls, including those related to an insolvency. You can avoid most with planning.

Reorganisations

Many businesses will now be considering transactions involving corporate reorganisations. They might want to take advantage of market conditions to buy or be considering the sale of business units to refocus strategy. Or they might become involved in an insolvency or reconstruction.