In a recent decision, [1], the High Court decided that it was not in the public interest to wind up a business rates mitigation scheme under its Insolvency Act powers, as it found that this scheme did not subvert the intention of insolvency law.

In what is believed to be the first case to deal with the question, any doubt as to whether the entirety of the duties owed by directors continue post administration or creditors’ voluntary liquidation (CVL) has been firmly laid to rest by the Insolvency and Companies Court’s (ICC) decision of ICC Judge Barber in Hunt (as Liquidator of Systems Building Services Group Limited) v Mitchie and Others [2020]¹.

The case of Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors [2020] EWHC 54 (Ch) examines whether directors’ duties continue after the company has become insolvent and confirms that they do, bringing welcome clarity to the point. As such, Insurers will need to review their policies to make clear if they wish to cover this risk.

Systems Building Services Group Ltd, Re [2020] EWHC 54 (Ch)

Liquidation is not a panacea for the relevance and application of directors' duties. A practical example of which involves a director of a company in insolvency procuring and agreeing to an off-market sale of a property to himself by a rogue IP at a price which he knew to be a significant undervalue.

Section 239(5) of the Insolvency Act 1986 (the “1986 Act”) limits the jurisdiction to reverse a preference to situations where “the company which gave the preference was influenced in deciding to give it by a desire to produce” the prohibited result. This involves a subjective enquiry which turns on the relevant actor’s state of mind.

Yesterday the UK Insolvency Service released their quarterly statistics spanning October to December 2019. These confirm that liquidations and administrations in 2019 hit levels not seen for over five years. This signals a potentially serious underlying concern about the UK economy.

In the landmark decision in Re Systems Building Services Group Limited [2020] EWHC 54 (Ch), ICC Judge Barber held that the duties of a director survive the insolvency of a company.

On 25 February 2020, the High Court handed down an important ruling: Granville Technology Group Limited (In Liquidation) and Others v Elpida Memory (Europe) Gmbh and Others [2020] EWHC 415 (Comm). This is the first ruling by an English Court on how the Limitation Act 1980 should be applied to secret cartel claims.

We previously considered the potential implications for insolvency professionals of the rise of cryptocurrencies (available here). One of the principal issues identified was the uncertainty surrounding the legal status of cryptocurrencies; what class of asset were they and, subsequently, how would they be treated under English law?

A winding up petition is a legal document that can be served by a company’s creditors when they are owed money by the company. If the debt amounts to £750 or more, then a creditor has the right to go to court and ask for a winding up petition to be issued, although courts view this remedy as something that should be reserved for when a company is genuinely believed to be insolvent, and not simply used as a means of debt collection.