On 16 December 2010, HM Treasury published a revised draft of the Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 (SI 2010/2993) (the “Amending Regulations”).  

NEW RULES ON PRE-ADMINISTRATION COSTS

Insolvency Practitioners have been eagerly awaiting the implementation on 6 April 2010 of the Insolvency (Amendment) Rules 2010 (“New Rules”). In addition to the many modernising changes made by the New Rules is the long awaited inclusion of what was believed to be a statutory entitlement to recover pre-appointment costs such as in negotiating a pre-pack. as an expense of the administration (New Rule 2.67(1)(h)).

Many of us in the construction industry seem to be hearing the same old bed time story over and over again: A instructs B to do the work; B does the work; A does not pay B; for months the parties dispute the level of payment due; B becomes fed up waiting for payment and takes steps to wind up A.

Is this the most appropriate way to deal with a disputed debt?

The Office of Fair Trading ("OFT") has announced that it will conduct a review of the corporate insolvency market in the UK. Its aim is to assess the level of competition in the UK market and ensure that the market itself is working well for consumers.

The insolvency of UK insurance companies is, fortunately, a fairly rare event. Even in the current difficult times - and despite speculation about the solvency of some insurers - we have yet to see a UK insurance company actually go into liquidation.

Today, HM Treasury announced the conclusion of discussions with Lloyds Banking Group (Lloyds) and Royal Bank of Scotland Plc (RBS), regarding their participation in the U.K.

It is not uncommon for companies, often property related joint ventures or single purpose vehicles, to be incorporated abroad for tax reasons but carry on much of their business in Scotland or elsewhere in the U.K. This can result in difficulties when determining where to initiate insolvency proceedings.

The FSA has published a statement entitled Wider implications referral: Lehman-backed structured products.  

In the statement the FSA together with the Financial Ombudsman Service have jointly concluded that the Lehman Brothers’ insolvency raises issues in the UK structured products market.  

It has been agreed that the FSA will now consider issues relating to Lehman-backed structured products under “the wider implications process” in order to allow it to explore all options to achieve the best outcome for consumers.  

In the construction industry, contractor insolvency delays projects, increases costs and may deprive the employer of remedies and third parties of meaningful warranty protection. In 2008, it was reported that the number of construction firms facing grave financial concerns was 547 per cent higher than in 2007 (Building, 14 November 2008). As contractor insolvencies are likely to increase in 2009, how can an employer protect its position at the start of a project and when contractor insolvency occurs?  

Contractual safeguards  

It is clear from the recent collapse of Bear Stearns that the real impact of the credit crunch is now being felt. With this in mind, how can landlords and tenants of commercial properties prepare themselves for a potential rise in the number of corporate insolvencies?

Landlords’ remedies – think outside the box

The landlord of a commercial property faced with an insolvent tenant will usually have two concerns: