It is perhaps not as well-known as it should be that the Bankruptcy (Scotland) Act 2016 sections 195 – 198 provides a six-week moratorium – effectively a postponement or period of protection from action to recover debts - to individuals, partnerships and trusts facing financial distress or liquidity issues.
The moratorium provides breathing space to allow parties to be protected from their creditors while they take advice and consider what debt relief options might be available to them.
A party can normally apply for the moratorium once in any 12-month period.
The landscape relating to winding-up petitions has changed due to the COVID-19 pandemic. Hundreds of petitions have been adjourned already, and the new Temporary Insolvency Practice Direction has now adjourned all hearings due to take place before 21 April across the country. It also sets out new procedures and timings for the listing and re-listing of petitions, with many hearings in London and the regions moving to hearings by video-conference for the foreseeable future.
The government has introduced a number of measures in order to assist businesses during the current Covid-19 pandemic. Unfortunately, for some businesses, this may not be enough to prevent their business entering some form of insolvency. Businesses and directors need to beware of the pitfalls that they could fall into, as they continue to trade. Two of the most common are Preference Payments and Transfers at Undervalue, both of which are discussed below.
Preference Payments
The Carluccio’s judgment provides some much-needed clarity on the interrelation of the Furlough Scheme and the requirements of insolvency legislation. It is to be commended for its clarity and for the fact that it had to construe the workings of the Furlough Scheme in the absence of any statutory guidance as to its implementation. It is to be hoped that, when the Government comes to enact the necessary legislative measures (including perhaps amendments to Schedule B1 and IR 2016), that it does so with this judgment very firmly in mind.
Introduction
The COVID-19 pandemic presents directors of all business entities1 with a profound and unprecedented set of challenges. Now more than ever, key decision-takers in businesses appreciate that their actions will be carefully judged following the crisis. Scrutiny of their actions will come from a range of interested and affected parties including creditors, employees, trades unions, landlords, customers, regulators, insolvency practitioners and possibly even law enforcement.
Legal opinions can be complex, and certain areas require the provision of reasoning to support the opining firm’s conclusion. Parties should discuss and agree the scope of legal opinions as early as possible within the life cycle of a deal. This article discusses some common areas for consideration.
WHAT IS A LEGAL OPINION AND WHY IS IT USED?
Legal opinions are formal letters typically provided to confirm a specified legal position in relation to a document or a suite of transaction documents.
For example, a firm practising English law may be asked to opine on whether:
As reviewed previously, the impact on Covid-19 losses will result in a steep increase in insurance claims under business interruption, public liability, product liability, employer’s liability, asset management, directors and officers, professional liability, errors and omissions, and marine insurance policies.
In Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors [2020] EWHC 54 (Ch), ICC Judge Barber has confirmed that directors of insolvent companies remain subject to fiduciary duties, even after those companies enter into an insolvency procedure.
Background
随着新冠肺炎疫情在全球范围内持续引发财务不确定性，我们认为是时候简要介绍英国法适用于陷入财务困境的公司的各种公司破产程序。下文将依次讨论管理程序 (administration)、接管程序 (administrative receivership)、公司自愿安排 (company voluntary arrangement)、债务偿还安排 (schemes of arrangement) 和破产清算 (liquidation)。此外，还将简述董事职责、有关破产中资产分配的规则以及在破产中可撤销或“可审查”的交易。
在本专业概要发文之前，英国商务、能源与产业战略部于2020年3月28日发布公告，旨在帮助处于破产拯救或重整程序中的公司继续开展交易，避免破产。简言之，英国商务大臣宣布：