But is it GAME over?
Pillar Denton Ltd and Others v Jervis and Others [2014] EWCA Civ 180
Summary – What happened?
A group of the UK's largest landlords have successfully overturned previous High Court decisions that had allowed insolvent tenants to continue trading from their premises without paying rent. The landlords in this case, which involved the retailer GAME, have been allowed to recover £3,000,000 in outstanding rents from the period of the tenant's administration.
CLLS responds on bail-in: CLLS' financial and insolvency law committees have responded to Treasury's consultation on the implementation of bail-in powers. CLLS feels it would have been better for the Financial Services (Banking Reform) Act 2013 and relevant secondary legislation to have been promulgated only once the EU Bank Recovery and Resolution Directive (BRRD) was final. However, it appears the UK Government does not want to wait until January 2016 to apply bail-in requirements and so is proceeding ahead of the EU timetable.
In the High Court decision of Jackson v Baker Tilly (unreported, 10 April 2014), the liquidators of an insolvent company successfully applied for the company's accountants to produce documents detailing their dealings with the company.
The claim here related to the ACA Standard Form of Contract for Term Partnering, which as Mr Justice Edwards-Stuart said was specifically devised for situations where one party requires the other to carry out a series of relatively minor but repetitive or cyclical tasks over a substantial period or “Term”: here building, repair and related services for a local authority. The employer or client would place orders for particular “Tasks” during the Term and the contractor (or Connaught), referred to as the “Service Provider”, would carry them out and submit monthly valuations for payment.
Key point
An English winding up does not cease to have effect when an overseas company is dissolved under the law of its state of incorporation.
The facts
Agrenco Madeira – Comercio Internacional LDA (the "Company") was incorporated under the laws of Portugal in March 2004. The Company presented a winding up petition in England in August 2009. Its centre of main interests was in Brazil and therefore the EC Regulation on Insolvency Proceedings did not apply. The Company was wound up in England as an unregistered company in October 2009.
Key point
Under English law there is a clear public interest in ensuring the timely and efficient administration of insolvent estates and parties should comply with all time limits in the Insolvency Rules 1986 unless there are good reasons for requiring more time.
The facts
10 February 2014
[2014] EWHC 229 (Ch)
Chancery Division (Etherton C)
A deputy registrar was wrong to dismiss a discharged bankrupt’s annulment application when the only creditor had decided not to prove for its debt. The deputy register also erred in his approach to the TIB’s application to change the basis of his remuneration.
03 April 2014
[2014] EWCA Civ 383
Court of Appeal (Sullivan, McFarlane and Lewison LJJ)
Further guidance from the Court of Appeal on the meaning of insolvency and the relationship between the cash flow and the balance sheet tests. A company that can only pay its debts as they fall due by incurring further debt is still insolvent.
The courts have been busy in recent months considering various schemes of arrangement and reconstructions, including the following 4 unusual and high-profile applications.
In the matter of Co-operative Bank plc
18 December 2013
Companies Court (David Richards J)
[2014] EWHC 4397 (Ch)
21 January 2014
[2014] EWCA Civ 26
Court of Appeal (Arden, Sullivan and Davis LJJ)
Following suspension of IVAs, all creditors were bound by varied IVAs approved at a further creditors' meeting directed by the court, even if they had become creditors after the initial suspension.