In our work with international companies supplying goods to the UK, we see the same issues arising regularly. In Part 3, we examined the types of insolvency process a customer may be subject to. In this fourth of five articles based on the five elements of the Wu Xing, we take the theme of Fire and explain the significant powers that arise for the insolvency practitioner on the entry into insolvency: to investigate propriety and recover assets to the central pool to pay creditors.
The recent decision of Adam Constable QC in the case of Meadowside Building Developments Ltd (in liquidation) -v- 12-18 Hill Street Management Company Ltd, considered an application for summary judgment to enforce a decision by an adjudicator in favour of an insolvent company.
Can they claim for the debts they are owed following the recent compulsory liquidation?
With the sad news that Thomas Cook entered into compulsory liquidation on Monday 23 September 2019, understandably the headlines have focused on the impact of the failure on those holidaymakers who require either repatriation or are now being forced to make alternative holiday arrangements. But what has been the impact on staff? As a global employer of 21,000 employees what are the consequences for them of Thomas Cook’s compulsory liquidation?
Section 127 of the Insolvency Act 1986 (“IA86”) says:
(1) In a winding up by the court, any disposition of the company’s property, and any transfer of shares, or alteration in the status of the company’s members, made after the commencement of the winding up is, unless the court otherwise orders, void.
Originally published on LexisLibrary and LexisPSL
Restructuring & Insolvency analysis: Thomas Cook is the third large company to be wound up by the courts in 18 months, following British Steel and Carillion in 2018. Professor Andrew Keay, barrister at Kings Chambers, 9 Stone Buildings and Lincoln’s Inn and Professor of corporate and commercial Law at the University of Leeds, discusses why it entered liquidation rather than administration and how it will impact employees and customers of Thomas Cook.
Original news
Originally published on LexisLibrary and LexisPSL
In a world of multinational businesses, ever-changing consumer trends and political uncertainties, insolvencies and financial restructurings of a cross-border nature are a common occurrence. Officeholders therefore frequently need to consider options that allow, at the very least, recognition of their appointment in the jurisdictions where the insolvent debtor has (or had) operations, assets or other relevant connections.
The recent case of Sell Your Car With Us Ltd v Anil Sareen will be of interest to practitioners in Corporate Insolvency as it provides a useful reminder that there is no strict rule that the winding up procedure is inapt for mere debt collection.
The Facts:
The creditor (“AS”) had engaged the debtor company (“SYC”) to sell his Maserati Levante sports car and on completion of the sale to deposit the proceeds in his bank account. Communications were agreed to be conducted by email.
Revisiting over 150 years of case law, the High Court has resolved a question on which both the courts and textbooks had given conflicting answers: is a director's liability for payment of a dividend which is unlawful as a result of incorrect accounts fault-based or strict?
Following an expedited trial, the High Court has rejected an application brought by a group of landlords known as the Combined Property Control Group (“CPC”) to challenge the company voluntary arrangement (“CVA”) proposed by Debenhams Retail Limited (“Debenhams”).
CPC challenged the CVA on five grounds. The judge in the case, Mr Justice Norris, held that four of the five grounds failed and directed certain “Forfeiture Restraint Provisions” be removed from the CVA as a result of the fifth.