The Court of Appeal has recently considered whether an LPA Receiver owes a duty of care to a bankrupt mortgagor in connection with the way the Receiver deals with the mortgaged property. In a decision which will be welcomed by Receivers and their insurers, the court decided that a Receiver owes no such duties.

The facts

Pre-packs involve the pre-determined sale of a business before it enters administration, allowing a sale within days of an administrator's appointment. Examples of pre-packs include Dreams, JJB Sports and stockbroker Seymour Pierce. Pre-packs are a useful tool for the insolvency profession allowing businesses to be sold before being unduly damaged by the insolvency process, often saving jobs that might otherwise be lost.

In Rainy Sky S.A and six others v Kookmin Bank [2011] UKSC 50, the Supreme Court provided useful guidance on the role of business common sense in construing a clause in a commercial contract, particularly in circumstances where there are competing plausible constructions, neither of which is clearly preferable on the language used alone.

The facts

The case of Goldacre v Nortel, decided in December, has clarified the circumstances in which an administrator is liable to pay rent under a lease as an expense of an administration. If rent is an expense of the administration, the landlord will almost certainly be paid in full for as long as the administrator uses the property. If it is not such an expense, the landlord will be an unsecured creditor who will be lucky to receive a few pence in the pound.

An application to admit witness evidence outside the directions timetable should be treated like an application for relief from sanctions under CPR 3.9 according to the High Court in Wolf Rock (Cornwall) Ltd v Langhelle.

Facts

COVID-19: On 28 March 2020 the Business Secretary announced further new far-reaching measures to help businesses combat the financial impact of COVID-19. What it the likely impact of the suspension of wrongful trading provisions and a moratorium for businesses in restructuring on your business?

Can a company file a notice of intention to appoint an administrator (NOI) if administration is just one of a number of potential options being explored for rescuing the company?

Earlier in April last year, we wrote an article on the insolvency exemption to the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). Insolvency practitioners will be disappointed to hear that it has now been confirmed that the exemption will be lifted later this year.  

Historically, HMRC has allowed insolvency practitioners to, at an early stage following their
appointment, cancel the VAT registration of the insolvent business. Practitioners have then been 
entitled to account for VAT on any subsequent supplies using HMRC’s form VAT 833 (Statement of 
Value Added Tax on goods sold in satisfaction of a debt).

The FOS opened last week for the business of being open. It is now subject to the Freedom of Information Act. However, theFOS web page on the point suggests the Service is trying to limit what will no doubt be a flood of requests.

The FOS’ web page sets out a long list of facts and figures it is most frequently asked about, organised into seven categories adopting the Information Commissioner’s model publication scheme for non-departmental public bodies covered by the FoIA.