Where the entirety of a debt is not included in an agreement to settle, a creditor can continue to prove in a bankruptcy for the balance.

With administrations and liquidations on the rise, companies may well-find that they occupy premises under a sub-lease where their immediate landlord has become insolvent and we look at their rights and how the position differs north and south of the border.

In April 2008 the Bankruptcy & Diligence (Scotland) Act 2007 ("the Act") introduced a new regime for obtaining permission for (and recalling) diligence on the dependence of a court action (i.e. arrestment and inhibition). In terms of the Act, before granting (or recalling) warrant for diligence, the court must be satisfied that:

On 23 March 2009, the Committee of European Securities Regulators (CESR) published a report on the market impact of the Lehman Brothers default. The report began with a brief discussion of the causes of the bankruptcy of Lehman Brothers Holdings Inc. It then set out some of the regulatory and industry responses to the challenges in the securities field including:

Although service of a statutory demand or winding-up petition on a company is a blunt and unsophisticated debt recovery tool, it will often have the desired effect for a creditor as they are seldom ignored and ignored only at the company's peril. It can often prompt payment of the sum due, or judgment owed, where previously there has been prevarication and empty promises of payment.

Here is a reminder of some important issues a (solvent) company should consider if a statutory demand or petition is served upon it.

Doing nothing is not an option

The PPF has issued a good practice guide for trustees of schemes with an insolvent employer, which is aimed at taking them through the assessment period effectively and efficiently and which takes into account the PPF's experience of the common issues experienced by trustees during an assessment period.

In DHL GBS (UK) Ltd v Fallimento Finmatica Spa – Butterworths Law Direct 20.2.09 the Commercial Court gave its first decision on the issues dealt with by the ECJ in the Front Comor.

In Masri v Consolidated Contractors (Oil and Gas) Company SAL – Butterworths Law Direct 6.2.09 a receivership order had been made, paragraph 15 of which stated that 'Nothing in this order shall, in respect of assets located outside England and Wales, require the defendants and/or their directors to disobey the order of any court of competent jurisdiction in relation to such assets'.

Many landlords are experiencing the difficulties caused by tenants going into administration. Often their administrators seem to ignore landlords’ interests and lease terms when putting pre-packs together and many let the buyers of the insolvent business into the premises under informal licence arrangements, putting the landlord entirely at the administrators’ mercy when it comes to the payment of rents. If they’re lucky, administrators will offer to pay rent on a monthly basis in arrears.  

Company Voluntary Arrangements or CVA’s

Mead sought to enforce an adjudicator's decision of £332k. Dartmoor resisted on the basis that, as Mead was subject to a CVA, a stay should be granted on any judgment otherwise awarded to Mead. Mr Justice Coulson refused. There was no previous authority dealing with the point, but the Judge decided the following principles were relevant: