To a layperson this may came as a surprise. But, to those familiar with the secondary loan market, it is confirmation of existing law.

A “vulture fund”– including a newly incorporated company with a share capital of only £1 that has not traded and has been established for the purpose of acquiring a defaulted loan with a view to realising more by enforcing than had been expended on acquiring the debt can be a “financial institution” for the purposes of the transfer provisions of a loan agreement.

A major consideration for any Claimant in an action seeking monetary damages is whether the Defendant to an action has the assets to meet a judgment, whether that be a claim against an individual or a limited company backed by the personal guarantee of an individual. That consideration should extend to a scenario where the Defendant has a judgment made against them and then either refuses to pay or cannot pay on time. The Claimant may have to seek their bankruptcy to achieve some payment.

The Pensions Regulator has announced, following several years of proceedings and court skirmishes, that a compromise has been reached in relation to the Financial Support Directions (FSDs) issued under the Lehman Brothers UK pension scheme.

FSDs and the Lehmans case – a reminder

The Pensions Regulator has today issued a Statement on its power to issue financial support directions (“FSDs”) against companies after an insolvency event has occurred. The Statement follows longstanding concerns of insolvency practitioners, which have arisen from ongoing court proceedings brought by the Lehman Brothers and Nortel administrators.

Background

Summary

The Insolvency Service has released its report on CVAs (the “Report”), which was commissioned in response to the significant concerns raised by the commercial property sector in recent years and the legal challenges launched by landlords against a number of CVAs.

What are the new provisions?

Introduction

With global economies facing uncertain times as a result of the COVID-19 pandemic, and many businesses facing significant challenges to cash flow, revenue and bad debts, the possibility of insolvency will be very real for some companies in the UAE. In such circumstances it is important that directors fully appreciate how their duties and liabilities will be impacted and ensure decisions made in a financial distress situation are made in full consideration of these.

The CVA challenge

The landlords’ claim against the Debenhams CVA was put forward on five grounds:

1. Future rent is not a “debt” and so the landlords are not creditors, such that the CVA cannot bind them

REJECTED: The definition of “debt” is broad enough to include pecuniary contingent liabilities, such as future rent.

2. A CVA cannot operate to reduce rent payable under leases: it is automatically unfairly prejudicial

Earlier today, the Court of Appeal handed down a significant judgment dealing with the adequacy of standard form after-the-event (“ATE”) insurance to defeat an application for security for costs.

In an unanimous ruling, the Court of Appeal overturned the High Court’s judgment on the defendants’ security for costs applications in Premier Motorauctions Limited (in liquidation), Premier Motorauctions Leeds Limited (in liquidation) v PricewaterhouseCoopers LLP and Lloyds Bank plc [2016] EWHC 2610 (Ch).

Introduction:

The Government has launched a new consultation on a number of technical and regulatory changes affecting pensions legislation. One of the proposed changes is to amend the entry rules in relation to the Pension Protection Fund (PPF). The consultation follows on from the recent Supreme Court decision in Olympic Airlines and the introduction of specific legislation to ensure the beneficiaries of that particular scheme received protection in circumstances where the entry rules otherwise excluded them.