When a creditor to a company believes that that company is insolvent, it is open to that creditor to present a Petition for the compulsory liquidation of that company. Section 135(1) of the Insolvency Act 1986 allows the creditor, on submitting a Petition for the winding up of a company, to apply for a provisional liquidator to be appointed.
CASE SNAPSHOT
In the matter of the Nortel Companies, the UK Supreme Court found that pension liabilities attributed to a company that arose prior to the occurrence of an insolvency event were not entitled to priority treatment, even if the first demand for payment was only made after the insolvency event occurred.
FACTUAL BACKGROUND
The Pension Act
Parties wishing to resist the enforcement of an adjudication decision on the grounds of insolvency usually need to show that the claiming party will not be in a position to repay the amount of the decision if required to do so in later court or arbitration proceedings. Two recent cases in the TCC have, however, shown that different considerations can apply in the less typical circumstances of a members’ voluntary liquidation and a creditors voluntary arrangement.
Maguire & Co v Mar City Developments
The decision of the Inner House of the Court of Session was released last week in the keenly awaited application by the liquidators of Scottish Coal who sought directions on whether a liquidator appointed to a Scottish company could:
On 13 December 2013, the Court of Session ruled that the liquidators of The Scottish Coal Company Limited (SCC) were not able to disclaim ownership of certain open-cast mines and the environmental permits which were connected with the operation of those mines. This ruling followed an appeal by the Scottish Environmental Protection Agency (SEPA), and overturns the previous decision of 11 July 2013, in which it had been ruled that the liquidators were entitled to disclaim this property.
IPs are always on guard for potential conversion claims - but what happens when no title can be established? Euromex clarifies the whole mess.
The background
The legal effect of “limited recourse” arrangements have been thrown into fresh doubt by a first instance decision of the respected Mr Justice David Richards in the case of Arm Asset Backed Securities S.A. [2013] EWHC 3351.
This decision is relevant to the following common financing arrangements.
The changes
Since 29 December 1986, the Insolvency Act 1986, as amended by 23 subsequent statutory instruments, has governed the way in which insolvency practitioners, lawyers, creditors, debtors and others dealing with insolvency issues, have addressed procedures such as bankruptcy, administration, liquidation and voluntary liquidation.
The High Court has confirmed that all rights relating to the control of data belonging to, or being controlled by, a company at the time it entered into liquidation remain vested in the company at and following its liquidation. Liquidators are therefore not personally liable for compliance with the Data Protection Act 1998 in respect of this data as they will be viewed as agents acting for the company rather than as 'data controllers'.
The Court of Appeal’s ruling in Neumans LLP v Andrew Andronikou & Ors [2013] EWCA Civ 916 has provided some useful guidance to insolvency practitioners on the courts’ approach to administration and liquidation expenses.
Pre-match warm up