In Evans v Jones the directors of a liquidated company sought to defend a claim brought by the liquidators that loan repayments were insolvent transactions by asserting that the company was balance-sheet solvent at the time of the transactions. The directors based this claim on the company having contingent assets in the form of dividend payments (to the directors) that were later found to be unlawful.
The UK Supreme Court has confirmed that an irrevocable agency will only be created in exceptional circumstances.
I can show that a company is insolvent and that it is reasonably likely that the statutory purpose can be achieved. I can have an administration order, right? Eh, actually no.
Creditors issued applications for administration orders against two hotel-owning companies. The companies sold hotel rooms as leases, which provided for repurchase in certain circumstances.
Campbell v Peter Gordon Joiners Ltd (in liquidation) and another (2016) UKSC 38 considered whether an employee could successfully bring a civil action against a director of a company in liquidation for having failed to obtain appropriate employers' liability insurance.
C was an apprentice joiner employed by a company who suffered an injury at work whilst working with an electric saw. The company held employers’ liability insurance but it did not respond to C's claim as the policy excluded claims arising from the use of “woodworking machinery” powered by electricity.
An attempt to rely on Libyan sanctions as a reason not to pay a debt due fails.
The creditor lent money to a company, guaranteed by the debtor. There was no dispute that the debtor owed the debt, but the debtor contended that to pay it would contravene sanctions in place against Libya. He applied, albeit five months out of time, to set aside a statutory demand served on him for the debt.
At first instance, the Judge granted an extension of time in respect of the set aside application and also set aside the statutory demand, agreeing with debtor’s position.
GENERAL CORPORATE
In this issue, we focus on cases concerning directors’ considerations when making a solvency statement for a capital reduction, and whether “bad leaver” provisions containing compulsory share transfers are capable of being contractual penalties.
Statements of solvency on a reduction of capital: what must the directors consider?
The High Court has held in BTI 2014 LLC v Sequana SA & others [2016] that payments of dividends were not made in breach of the Companies Act 2006 (the “Act”).
LITIGATION, ARBITRATION, INVESTIGATIONS AND FINANCIAL CRIME
QUARTERLY UPDATE
Welcome to the latest issue of our Quarterly Update, in which we look at some of the recent highlights and developments in banking and finance disputes and financial crime.
IN THIS ISSUE WE LOOK AT:
A salutary lesson: if you do not intend to be bound by a letter of commitment, say so clearly
The presumption that courts normally validate dispositions by a company subject to a winding up petition if such dispositions are made in good faith and in the ordinary course of business has been called into question in the recent case of Express Electrical Distributors Ltd v Beavis and others [2016].
The Briggs Report
The final report of Lord Justice Briggs' LJ's Civil Courts Structure Review was published on 27 July 2016. Lord Justice Briggs identifies five main weaknesses of the civil courts structure, namely: