Following the Enterprise Act 2002, the preferential status which HMRC had enjoyed in an insolvency was abolished, rendering HMRC the same as any other unsecured creditor. The effect of this was to swell the pot of assets available to be applied to all unsecured creditor claims.
Philip Hammond announced in Monday’s budget that HMRC’s preferential status is to be restored. What does this mean for HMRC and unsecured creditors?
The Budget provided that:
The recent High Court decision in Caribonum Pension Trustee Limited v Pelikan Hardcopy Production AG [2018] EWHC 2321 (Ch) will provide some comfort for pension plan trustees owed money by insolvent sponsoring employers by allowing trustees to pursue guarantors within the same group for those debts.
What was contended to be an abuse of Court process has been confirmed by the Court as a legitimate debt recovery strategy. This was on the basis that a contractual agreement, a guarantee, was in place that was legitimately enforceable by a pension plan trustee.
Paul Muscutt, London restructuring partner at law firm Squire Patton Boggs, talks to Andrew Tate, former R3 President, Chair of R3’s Policy Group and Partner at accountancy firm Kreston Reeves LLP, about conflicts of interest in the restructuring and insolvency profession*.
In the holiday season many of us jet-set to foreign shores – but do we ever think about how we might get home if our budget airline goes bust or are we just hunting for the best deals to make the pound stretch further?
The last decade has seen a number of airlines collapse or be swallowed up by competitors:
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include:
The case of Davey v Money and Anor (2018) EWHC 766 (Ch) should serve as a gentle warning to secured creditors to be aware of the level of their involvement in the administration of a customer.
Background
Angel House Development Limited (“AHDL“), a property development company, borrowed £16 million from Dunbar Assets Plc (“Dunbar“) in order to fund the purchase and redevelopment of a property, Angel House, in Tower Hamlets. Dunbar took security for the loan(s) in the form of a debenture.
The Department for Work and Pensions has issued a consultation paper which seeks to strengthen the powers of TPR in connection with defined benefit pension plans, coming in response to recent corporate failures which had pension plans with significant deficits.
The proposals introduce four new “notifiable events” in addition to those that already exist, the introduction of hefty (potentially unlimited) fines, through the introduction of new civil and criminal penalties and widening the net of those potentially liable for an offence, to include directors.
The DWP is consulting on new powers for The Pensions Regulator (TPR). The consultation covers:
The Ministry of Justice is seeking feedback from key stakeholders on the impact of Part 2 of the LAPSO reforms, which abolished the recoverability of success fees under CFAs and after the event insurance premiums.
Until April 2015 insolvency claims were exempt, enabling insolvency practitioners to pursue claims and if successful recover any success fee and more importantly after the event insurance premiums. There was concern at the time, that by abolishing the ability to recover the premium that insolvency claims would be stifled.
The revised Insolvency Practice Direction has been published and approved with effect from 4 July. This replaces the PD published in April this year. The revisions (primarily dealing with the distribution of specialised insolvency work) widen the scope of work which can be undertaken in local courts, whilst also giving the ability to transfer insolvency cases back to the local hearing centres if there is sufficient expertise to deal with the matter.