The Court of Appeal has held that the Electronic Money Regulations 2011 do not impose a statutory trust in respect of funds received from e-money holders (who nonetheless enjoy priority status in respect of their creditor claims), providing some much-needed clarity on this issue for e-money institutions and their clients.
A link to the judgment can be found here.
Background
Insolvency practitioners will welcome the confirmation that they cannot be expected to be aware of same degree of information as if company was still trading
In the recent Court of Appeal case of Re Ipagoo LLP, the court provided welcome clarity on the status of e-money holders’ claims under the Electronic Money Regulations 2011 (EMR). In brief, the Court of Appeal held that the EMR do not impose a statutory trust in respect of funds received from e-money holders. The court confirmed, however, that e-money holders will still enjoy priority status in respect of their e-money creditor claims (crucially) whether or not their funds have been duly segregated from the general pool of assets, as required under the EMR.
Celebrated WWII leader, General George Patton, once said “Do not try to make circumstances fit your plans. Make plans that fit the circumstances.” Unfortunately, it’s advice that is not being fully heeded, according to the FCA’s latest thematic review on wind-down planning The FCA has concluded that “significant further work” is needed to ensure wind-down plans are credible and operable, and has urged all firms to ensure adequate procedures and resources (both financial and non-financial) are in place.
Ristorante Ltd t/a Bar Massimo v Zurich Insurance Plc [2021] EWHC 2538 (Ch)
This case is an example of where an insurer alleged that the insured had not complied with the duty of fair presentation introduced by the Insurance Act 2015 and used the insured’s failure to disclose the past involvement of its directors in insolvent companies as a reason to refuse to pay out following a fire. However, the insurer was not successful because of the way in which the question that gave rise to the alleged non-disclosure was worded.
Background
For the first time in England & Wales, a court has ordered the winding-up of a listed plc on the grounds of loss of substratum – the abandonment of the company's original main object and purpose. If Hong Kong follows this decision, it would be very welcome to minority shareholders who would have an additional option to retrieve their investment monies from companies that embark on a completely different path to that for which they initially signed up.
In this edition of Restructuring Watch, we reflect on the first court decision on the moratorium procedure, some recent schemes and restructuring plans, the lifting of the remaining pandemic-related restrictions for commercial landlords alongside the introduction of the Commercial Rent (Coronavirus) Act 2022 and an extension of the UK directors’ disqualification regime.
Corbin & King: First Judicial Consideration of the CIGA moratorium
Following the Coronavirus pandemic, the Scottish Government introduced two key Acts. The Coronavirus (Scotland) Act 2020 and the Coronavirus (Scotland) (No.2) Act 2020 - together, these Acts made two significant changes to personal insolvency in Scotland.
The 2020 Coronavirus (Scotland) Acts
The Financial Conduct Authority has announced this week that Insolvency Practitioners at Teneo Financial Advisory Limited have been appointed as special administrators following Sberbank CIB's entry into special administration.
It has almost been 12 months since the Administration (Restrictions on Disposal etc to Connected Persons) Regulations 2021 came into force on 30 April 2021. The regulations require an administrator to obtain creditor approval or a report from an independent evaluator in advance of completing a “substantial disposal” of the company’s property to a connected party within the first eight weeks of the administration.