The Inner House of the Court of Session has found that, where a business had no realistic prospect of continuing in existence, it was not appropriate to assess whether a property was sold at an undervalue by reference to a forced sale valuation.

The Court’s judgment serves as a valuable reminder of some fundamental principles of insolvency law.

The facts

Whilst there is evidence that, especially in the retail market, the number of store closures and resulting empty units is at its lowest level since a peak in 2012, high profile announcements such as that of BHS mean that they are still a reality. The Court has, with this decision, provided a timely reminder of the principles of surrender by operation of law of which landlords, tenants and guarantors should be mindful.

Summary 

Many will be familiar with the words “further advances” and associate this term with typical boiler plate provisions in finance documents.

In a recent case (In the matter of Black Ant Co Ltd (in administration) [2014] EWHC 1161 (Ch)(15 April 2014) the High Court provided useful commentary on the meaning of “further advances” in the context of the priority of security.

At this time of year, sports pages are normally rife with transfer speculation before the new domestic seasons begin across the UK. This summer is different however, due to increased interest in Glasgow Rangers and the effect of “TUPE transfers” of players to the Rangers Newco.

The Full Court of the Federal Court of Australia has become the first appellate court among ratifying countries to look directly at the meaning of “give possession” and “giving possession of the aircraft object to the creditor” under the Protocol to the Convention on International Interests in Mobile Equipment (known as the Cape Town Convention) on matters specific to Aircraft Equipment (the Protocol) in the context of an insolvency (the Virgin Australia insolvency) in Wells Fargo Trust Company, National Association (trustee) v VB Leaseco Pty Ltd (admin

Introduction

The decision of ICC Judge Barber in the case of Stephen Hunt & System Building Services Group Limited -v- Brian Michie & System Building Services Group Limited [2020] EWHC 54 (Ch) was recently handed down and it is an interesting decision about directors’ duties post the appointment of an administrator or liquidator.

Facts

The facts are quite involved and matter specific, and gave rise to a number of issues, but for present purposes the key issues are as follows.

A recent TCC decision has concluded that the contractor insolvency provisions of the JCT form continue to apply after a termination by the contractor for repudiation. This conclusion may give rise to surprising results and potentially allow an employer to claim from the contractor additional amounts incurred in completing the works with a third party even after termination for the employer’s own default and/or repudiation.

A major consideration for any Claimant in an action seeking monetary damages is whether the Defendant to an action has the assets to meet a judgment, whether that be a claim against an individual or a limited company backed by the personal guarantee of an individual. That consideration should extend to a scenario where the Defendant has a judgment made against them and then either refuses to pay or cannot pay on time. The Claimant may have to seek their bankruptcy to achieve some payment.

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

In our Law-Now of 4 April 2012 (click here for link), we reported on the decision of the court in the case of Leisure (Norwich) II Limited v Luminar Lava Ignite Limited (in administration).  The detailed judgment has now been released, setting out the rationale for the decision and summarising the position on rents in administration generally.

The legal position on this issue is now: