In Re Mark Irwin Forstater [2015] BPIR, the petitioning creditor presented a bankruptcy petition against the debtor, Mr Forstater, on 13 June 2014. It first came before the court on 30 July 2014, when it was adjourned to allow the  debtor to take legal advice. At the adjourned hearing on 12 August 2014, the debtor indicated that he intended to pursue an IVA. The hearing was adjourned again to await the outcome of a meeting of creditors. The meeting of creditors was itself adjourned for 14 days from 1 September 2014 to 15 September 2014.

Income payments orders (IPOs) are an essential tool for the trustee in bankruptcy in realising a bankrupt’s assets. Until recently, it had been assumed that, absent circumstances akin to fraud, a trustee in bankruptcy could not touch a bankrupt’s undrawn pension. However, in Raithatha v Williamson, the court decided that an income payments order may be made where the bankrupt has an entitlement to elect to draw a pension but has not exercised it at the time of the application. 

Drawn versus undrawn

The insolvency of Scottish Coal Company Ltd ("SCC") has given rise to two recent Scottish Court of Session cases regarding performance bonds – East Ayrshire Council ("EAC") v Zurich Plc (24 June 2014) and South Lanarkshire Council ("SLC") v Coface SA (27 January 2015). 

Since changes were made to the Bankruptcy Act 1985 (the “Bankruptcy Act”) in 2008 it has been possible for sheriffs to continue sequestration petitions for up to a maximum of 42 days.  This was a change from the previous position whereby sequestration petitions could only be dealt with by the grant of the award or dismissal, and was brought in in recognition of the common practice adopted by many sheriffs.

Employees who transfer to a new employer from a business that is under insolvency proceedings may be able to recover unpaid wages and other debts from the Secretary of State.

However, BIS v Dobrucki has confirmed that the Secretary of State will only pick up the liabilities of the old employer (the transferor).  It will not be responsible for liabilities that are incurred after the transfer has taken place; that is, any liability of the new employer (the transferee).

The background

The Small Business, Enterprise and Employment Act (the Act) recently received Royal Assent. The Act introduces a number of new provisions across a wide range of issues, including regulatory reform, public sector procurement and companies. In relation to the insolvency and restructuring sector, there are a number of provisions which are likely to garner significant interest in the coming months.

Until recently, there was little call for restructuring and turnaround specialists in the UK to focus on the oil and gas industry. That has now undoubtedly changed.  In the second half of 2014, Brent crude prices fell from over US$100 a barrel to around US$50, and although prices have since stabilised (currently near the US$60 mark), a low price environment in the medium term seems likely. That is not bad news for all in the oil and gas industry.

The 18 March saw George Osborne’s budget speech, heralded by Mr Osborne announcing that “Britain is walking tall again” and promising to “use whatever additional resources we have to get the deficit and the debt falling”. We examine what the drivers behind the hyperbole might mean for the insolvency community.

Further austerity as the key theme

Just before Christmas last year, the High Court handed down a judgment in a bankruptcy case which was contrary to a High Court decision in a previous pensions and bankruptcy case on essentially the same issues. It has left this area in some uncertainty for the time being and is the latest in a long history of developments in this area.

A little bit of history

The BIS and Scottish Affairs Commons Select Committees have published a joint report recommending greater protection for workers when a business is faced with insolvency. The report was issued in response to the recent collapse of City Link (The impact of the closure of City Link on Employment).