Key points
Agreements relating to costs in the course of their office could not be set aside by liquidators subsequently appointed.
The facts
In the November 2013 edition of Pensions Pieces we referred to the Olympic Airlines case where a UK pension scheme could not qualify for entry to the Pension Protection Fund ('the PPF') because its sponsoring employer was suffering main liquidation proceedings in Greece, and further insolvency proceedings could not be established to satisfy the current entry conditions
Key Points
Where a sole director and shareholder of a company had breached fiduciary duties he could not ratify the breach if the company was insolvent;
Claims against the company in liquidation by dishonest assisting parties could not be set off under rule 4.90 Insolvency Rules against any liability they had in damages for that assistance.
The Facts
Key points
When deciding whether to grant an order that administrators may sell secured assets as if they are not subject to security the court will:
- carry out a balancing exercise as between the prejudice to the secured creditor and the prejudice which would be suffered in the administration; and
- protect the secured creditors' rights by ensuring that the assets subject to security were valued appropriately taking into account the circumstances of the administration.
Facts
Key Point
Two recent cases have resulted in innovative structures for restructuring the finances of groups of companies being sanctioned by the English Courts pursuant to schemes of arrangement. The trend for using such a mechanism for financial restructuring shows no signs of abating. On the contrary the innovative scope of such schemes appears to be expanding
Stemcor restructuring
The scheme
Background
Key Point
The liquidation of an agent for service appointed by a Borrower under a loan agreement did not prevent the Lender from validly serving process on the Borrower by delivering documents to that agent.
The facts
A loan agreement contained the following clause:
"Service of process. Without prejudice to any other mode of service allowed under any relevant laws, each Borrower -
Key points
The court has jurisdiction to order the UK Registrar of Companies to replace previously filed administrators' proposals.
The Facts
The administrators of a company filed a statement of proposals with the Registrar but then sought to replace the proposals because they contained information that the company was obliged to keep confidential. The administrators argued that:
Key Point
The Graham Review into pre-pack administrations suggests beefing up SIP16 and creating new steps in the sale process where the sale is to a connected party but stops short of proposing new legislation.
The Graham Review
Key Point
Neither failure to obtain debtor's consent to modifications to an IVA proposal, prior to the creditors' meeting; nor the unauthorised exercise of a proxy at a creditors' meeting render an approved IVA a nullity.
The facts