In as much as the Government has been in the consistent process of encouraging business operations in the nation, it also has the objective to create more transparent and systematic mechanism ensuring time bound manner and for maximization of the value assets. One of the major challenges faced by the modern commercial sector is the reposition of faith of the creditors who put their hard-earned investments at the fate of the success of the business transactions undertaken.
Resolution Procedure
Ireland has a temporary insolvency process known as “court protection” and commonly called examinership. This provides a breathing space within which a court will determine whether parts of the business can survive after restructuring. This may entail existing leases being disclaimed. The recent case of Bestseller Retail Ireland Limited gives an interesting example of how the court will exercise its discretion in considering an application to disclaim a lease.
Background
INTRODUCTION
Many practitioners may not think of stamp duty as a particular risk when taking on a liquidation or a receivership and there is limited published guidance on the topic. Against a background of an increasing number of business failures including companies operating in property development it is likely that liquidators and receivers will be faced with stamp duty issues on a more frequent basis. The purpose of this article is to identify some areas where practitioners may encounter stamp duty issues.
PROOF OF TITLE
The Court of Appeal has dismissed an appeal by Steel & Tube Holdings Limited (STH) against the legal basis and quantum of a $750,000 judgment based on a “de facto amalgamation” with its subsidiary company.
The ruling reinforces the message from the High Court that directors must be careful to maintain a subsidiary’s independence if they are to protect the parent against liability for the subsidiary’s debts.
The context
The Supreme Court’s decision in a dispute over a parent company guarantee will change the way insolvency practitioners deal with the distribution of assets when a corporate group collapses.
Belmont Park Investments Pty Limited v BNY Corporate Trustee Services Limited and another [2011] UKSC 38.
The Supreme Court has clarified the extent to which it is possible for a contract to provide for a company or individual to lose assets on insolvency.
Summary
Well-established rules are unchanged, so landlords can still forfeit leases on insolvency. In other cases, if a transaction is entered into in good faith and for valid commercial reasons, it is likely to be upheld.
In relation to the Great Lakes UK Limited Pension Plan a settlement was again reached before a full hearing with the Determination Panel could take place as reported by tPR on 13 July 2011.
The UK Pensions Regulator (the Regulator) has just announced that it has reached a settlement with the intended target of its first Contribution Notice (CN), with the result that the CN has been issued, but for a far lower amount than the Regulator originally sought. This case gives important guidance on the situations in which the Regulator believes it will be justified in issuing a CN, and on the potential liabilities targets may face.
The Moral Hazard Powers
The High Court has struck down a company voluntary arrangement on the ground that it unfairly prejudiced a landlord who was to lose the benefit of a guarantee given by the tenant’s parent company. The judge said it was “unreasonable and unfair in principle” to require the landlord to give up the guarantee and there was “no sufficient justification” for requiring the landlord to accept a sum of money in lieu.