Following our 2016 article, the Court of Appeal has upheld the decision of the High Court that dividends are liable to challenge as transactions defrauding creditors under section 423 of the Insolvency Act 1986 (the “IA”).

• Judgment was handed down in long-running bankruptcy proceedings against Kevin Stanford, a well-known businessman who founded fashion brands such as All Saints and Karen Millen (with his former wife of that name).
• The focus below is on the petition of Islandsbanki HF (“IB”).

Background

The Debtor

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in France, Hong Kong, Italy, Singapore, and the United Kingdom and as an affiliated partnership conducting the practice in Japan. Latham & Watkins operates in South Korea as a Foreign Legal Consultant Office. Latham & Watkins works in cooperation with the Law Office of Salman M. Al-Sudairi in the Kingdom of Saudi Arabia.

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in France, Hong Kong, Italy, Singapore, and the United Kingdom and as an affiliated partnership conducting the practice in Japan. Latham & Watkins operates in South Korea as a Foreign Legal Consultant Office. Latham & Watkins works in cooperation with the Law Office of Salman M. Al-Sudairi in the Kingdom of Saudi Arabia.

The UK Government has announced proposals to introduce a new UK restructuring plan and moratorium, together with certain other changes to the corporate governance regime relevant to companies in distress. In addition, insolvency termination clauses will in certain circumstances no longer be enforceable in the event that one party to a contract enters into an insolvency proceeding.

Facts 

Mr Kuldip Singh Birdi was made bankrupt in March 2012, on the Petition of HMRC. Three Applicants (the “Applicants”) to these proceedings had all submitted proofs of debt as creditors in Mr Birdi’s bankruptcy. Together, their claims total £189,983.

The First Respondent in these proceedings, Mr Price, was appointed as Mr Birdi’s Trustee in Bankruptcy at a meeting of creditors held in July 2012. In January 2014, Mr Price retired from practice and was removed as Trustee and the Second Respondent, Mr Pettit was appointed in his place.

EY's Hunter Kelly and Alan Hudson have been appointed administrators over UK construction services company Interserve, hours after it failed to secure shareholder approval for a restructuring plan.  

Kelly and Hudson were appointed over Interserve Plc, the holding company for the Interserve Group, on 15 March after the plan failed to win approval at a shareholders' general meeting earlier the same day. 

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