In Butters and ors v BBC Worldwide Ltd and ors, decided on 20 August 2009, the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors access to assets and therefore contrary to public policy in the light of insolvency laws.
BUSINESS IMPACT
The Employment Appeals Tribunal (EAT) has decided that the sale of a business by way of a pre-pack administration[1] did not result in a transfer of employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006, (TUPE Regulations or TUPE).
TUPE Regulations
In the matter of Bernard L Madoff Investment Securities LLC [2009] EWHC 442 (Ch), Mr Justice Lewison granted an application for the transfer of personal data in the possession of the joint provisional liquidators of a UK subsidiary to the trustee in bankruptcy of its parent company in the US, Bernard L Madoff Investment Securities LLC. The application was granted on the basis that it was necessary for reasons of substantial public interest.
Introduction
In the current economic crisis, an increasing number of companies are facing financial difficulties and potential insolvency. Unsurprisingly, at such times, tax issues can often be overlooked. This can lead to potential tax risks, lost opportunities and a failure to maximise assets. Correct planning can make a significant difference to the potential tax liabilities and maximisation of tax assets of a company or a group that is facing insolvency.
Historically, the United Kingdom has not had a specialised bankruptcy regime for dealing with the failures of financial institutions. Rather, these were handled under the same rules that applied to ordinary corporations.
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
Pensions and insolvency legislation uses the test in the Insolvency Act 1986 for assessing whether a person is ‘connected’ or ‘associated’ with another. This test is important because various statutory provisions use it, especially in limiting the persons whom the Pensions Regulator can make responsible for pension scheme deficits under the ‘moral hazard’ powers in the Pensions Act 2004. This briefing gives an outline of the statutory provisions and points to some difficult areas.
Why is this relevant?
On 15 September 2008, the FSA published a statement concerning Lehman Brothers Holding Inc.
In the statement the FSA states that Lehman Brothers Holding Inc, a US investment bank, announced that it intends to file a petition under chapter 11 of the US Bankruptcy Code.
A business you are buying or selling, if reorganised for sale, may be less valuable if you do not avoid tax pitfalls. This note highlights the most common pitfalls, including those related to an insolvency. You can avoid most with planning.
Reorganisations
Many businesses will now be considering transactions involving corporate reorganisations. They might want to take advantage of market conditions to buy or be considering the sale of business units to refocus strategy. Or they might become involved in an insolvency or reconstruction.
A business you are buying or selling, if reorganised for sale, may be less valuable if you do not avoid tax pitfalls. This note highlights the most common pitfalls, including those related to an insolvency. You can avoid most with planning.
Reorganisations
Many businesses will now be considering transactions involving corporate reorganisations. They might want to take advantage of market conditions to buy or be considering the sale of business units to refocus strategy. Or they might become involved in an insolvency or reconstruction.