BoE has published a paper on central counterparty (CCP) loss-allocation rules. To avoid a CCP’s insolvency, these rules allocate among the CCP’s participants any losses exceeding the CCP’s pre-funded default resources, such as the margin posted by clearing members (CMs), the mutualised default fund and the CCP’s own equity. The options the paper suggests include calling additional resources from CMs, applying haircuts to margin owed to any CM or terminating unmatched open contracts.

UK Supreme Court decision confirms traditional rules on enforcement of all US judgments in England and reverses a significant liberalisation of cross-border bankruptcy law.

The UK Supreme Court today delivered an important decision on the meaning of the so-called 'balance sheet insolvency test' in s.123(2) of the Insolvency Act 1986 (UK) (BNY Corporate Trustee Services Limited v Eurosail 2007-3BL PLC [2013] UKSC 28 ("Eurosail")).

Following last weeks’ report from the Banking Standards Commission in which three former senior executives of HBOS were heavily criticised thoughts have turned to whether or not there is enough evidence for the executives to have disqualification proceedings brought against them. The report named the three executives responsible, and said that the bank, having run up £47bn losses in bad loans, would have gone bust even if the 2008 financial crisis had not happened.

How can a director be disqualified?

In November 2012, People Can, a charity employing around 300 people, went into administration after being overwhelmed by a pensions deficit of over £17 million. With charitable donations and public funding reducing, they will not be alone, as many charities face an uncertain future.

There have been a number of recent English Court judgments of interest in the corporate field and this corporate update reports on cases relevant in relation to warranties and representations in M&A transactions, restrictive covenants in acquisition agreements, the enforcement of foreign judgments in cross-border insolvency proceedings and the piercing of the corporate veil.

WARRANTIES OR REPRESENTATIONS? - Ensuring clarity of intention when drafting acquisition agreements

Following the announcement that Crystal Palace Football Club had gone into administration in January 2010, the club's administrator wanted to sell the club as a going concern. Shortly after he  signed a sale and purchase agreement with the newly formed Crystal Palace Football Consortium (CPFC) he discovered that the club had severe financial problems and decided to 'mothball' the club during the out of season period, in the hope of selling it in the future. However CPFC then decided to withdraw its offer for the club and on 28 May 2010 the four claimants were made redundant.

A recent decision of Mr Justice Mann in VLM Holdings Limited v Ravensworth Digital Services Limited [2013] EWHC 228 (Ch) held it is possible that termination of a head licence on insolvency of the licensor does not necessarily mean a sub-licence becomes ineffective.

What was it all about?

The Court of Appeal has held that a settlement agreement, in which the defendant acknowledged that a debt was payable in full and agreed the mechanics and timing of payments, had the effect of excluding the defendant’s right of equitable set-off: IG Index Ltd v Ehrentreu [2013] EWCA Civ 95. The claimant was therefore entitled to summary judgment on the debt. The defendant however remained free to pursue his cross-claim for damages against the claimant.

Peter Bloxham has completed the first phase of his independent review of the Investment Bank Special Administration Regulations 2011 and in February 2013 presented an interim report, which HM Treasury has now published. In addition to making a number of immediate recommendations, the interim report sets out further areas to be reviewed as part of a second phase of work.