On 31 March 2010, the UK Insolvency Service released a new consultation paper entitled "improving the transparency of, and confidence in, pre-packaged sales in administrations.
On 6 April 2010 a second wave of major changes to the UK Insolvency Rules 1986 (the Rules) came into force.
In the event of a tenant becoming insolvent, it is clearly important for a landlord to know where rent payable ranks in administration. A recent landmark decision handed down by the High Court strengthens the position of landlords by deciding that rent can now be more widely payable as an expense of the administrator.
Background
Simply, if rent is ranked as an expense of the administration1 then it is almost always discharged in full as a mandatory expense of the administrator, rather than being placed with lower priority creditors.
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)).
In a blow to administrators that will surely impact on the timings of any administration, most particularly those involving a large property portfolio, HHJ Purle, sitting in the High Court, has handed down a decision that will have ramifications potentially as serious as those of Re Trident Fashions for administrators in considering how long to remain in office, or indeed whether to accept an appointment at all.
On the 12 November 2009, the OFT launched a market study into corporate insolvency. The investigation was prompted by concerns raised with the Government and the Insolvency Service, and also following a recent World Bank report which showed that the costs of closing a business in the UK are higher than in other countries.
THE PERENNIAL PROBLEM OF UNPAID DEBTS – YOUR RECOVERY OPTIONS
The English High Court has recently delivered judgment in the IMO Car Wash case (In the matter of Bluebrook Ltd and others [2009] EWHC 2114 (Ch)), in which the High Court considered whether to sanction three related schemes of arrangement for restructuring indebtedness proposed by the IMO Car Wash group to the senior lenders of the relevant group companies.
Background
In the current market turmoil, several banking and insurance names have already had to be rescued by government-brokered packages. It is therefore timely to review what rights institutional investors have in the event of counterparty insolvency. Unfortunately, the picture is complicated, not just because the question of how pension fund investors can get their money back may have an international dimension, but also because governments keep moving the goalposts on the availability and adequacy of compensation schemes.
Where does the claim arise?
The Licensing Act 2003 came into force in November 2005. Its effects were considerably wider than the much-publicised ‘24 hour drinking’ relaxation and, in particular, it makes specific provisions in relation to insolvency.