Clauses common in syndicated facility agreements were considered and construed in favour of the majority lenders:

-- Strategic Value Master Fund Ltd v Ideal Standard International Acquisition S.A.R.L. (England, High Court, 4 February 2011)

This case involved an examination of clauses common to syndicated facility agreements. The agreement here was based on the LMA standard.

In another case involving administrators, an employment tribunal somewhat controversially has held that the individual administrators could be liable as principals in an agency relationship with employees of a company in administration.

Improved Rights for Unsecured Creditors of Insolvent Companies

In our December 2010 insolvency update, we reported on the UK High Court's decision in BNY Corporate Trustee Services Limited v Eurosail.

In the recent case of BNY Corporate v Eurosail[1], the Court of Appeal for the first time considered how the 'balance sheet' test of corporate insolvency in section 123(2) Insolvency Act 1986 (IA 1986) should be applied.

Section 123(2) IA 1986 provides:-

'A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company's assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities.'

The Financial Markets and Insolvency (Settlement Finality and Financial Collateral Arrangements) (Amendment) Regulations 2010 came into force on 6 April 2011.

In Rubin v Coote [2011] EWCA Civ 106 (09 February 2011) the Court of Appeal has upheld the decision of a liquidator to settle litigation against a former director of a company notwithstanding the opposition of the company’s creditors.

It is an age old problem for creditors who are faced with debtors who ask for more time to pay their debts. The Civil Procedural Rules (CPR) 14.9 and 14.10 allow for a debtor, following the admission of their debt, to request time to pay. It is open for a claimant to choose whether or not to accept a defendant’s proposals; if the claimant does not accept the defendant’s proposals, it is for the court to determine the time and rate of payment. The court’s discretion conferred by CPR 14.10 to extend time for payment has not, until now, been examined.

In circumstances where a debtor lacks mental capacity to deal with a statutory demand and subsequent bankruptcy petition, the court will rescind or annul a bankruptcy order.

In previous issues of TransAtlantic, we reported that the UK Pensions Regulator had issued contribution notices (CNs) and financial support directions (FSDs) against insolvent companies in the Nortel and Lehman Brothers groups. Click here for the June story on Nortel (see page 5); click here for the November story on Lehman (see page 7).