This half-yearly update summarises significant insurance coverage cases in the English courts in the second half of 2022 concerning Covid-19 business interruption insurance, jurisdiction and rights against insurers of insolvent companies.
Significant Insurance Coverage Cases in H2 2022
Covid-19 BI Cases:
Cryptocurrency is a hot topic in the legal industry and one with which the legal world is really just starting to grapple. This is ever more prevalent with a number of recent high-profile crypto insolvencies including Three Arrows Capital, Celsius Network and FTX.
In our latest report, Partners Alastair Massey and Phil Reynolds examine the retail landscape
Over one in five (22%) retail businesses in the UK aren’t confident of trading through to the end of 2023, according to new research published in our retail report.
Dispute Resolution analysis: When the owners and controllers of a company refused to identify the recipient of payments made out of the company during the course of arbitration proceedings, their defence to a claim under section 423 of the Insolvency Act 1986 was struck out and judgment was entered against them.
Integral Petroleum SA v Pretrogat FZE and ors [2023] EWHC 44 (Comm)
What are the practical implications of this case?
Following the sanctioning of the Good Box restructuring plan (RP) it seems the answer is yes. This might sound surprising to those familiar with schemes of arrangement, because that outcome is at odds with the long-standing decision in Re Savoy Hotels.
For those less familiar with schemes and scheme case law, the court declined to sanction the Savoy scheme because the company did not approve it, consequently the judge found that the court had no jurisdiction to sanction it.
NGI Systems & Solutions Ltd v The Good Box Co Labs Ltd [2023] EWHC 274 (Ch) records the court’s reasons for sanctioning a restructuring plan made between the defendant company, The Good Box Co Labs Limited, its members, and separate classes of its creditors pursuant to section 901F Companies Act 2006. It also deals with other matters arising out of the company’s administration.
Nicola Sharp considers the recent appeal decision in Tradition Financial Services Ltd vBilta (UK) Ltd [2023] EWCA Civ, and the ways in which it affects the definition of fraudulent trading.
With the cost-of-living crisis and a possible recession facing the UK economy, it is not surprising that government statistics show insolvencies are rising significantly, with a substantial increase on pre-pandemic levels, and up to 80% higher than the previous 12-month period.
An emerging trend within insolvencies is the recovery of crypto assets, whether the businesses are within the crypto sector, or whether it is any other entity holding value in cryptocurrencies.
With an increased number of businesses experiencing financial difficulties given rising inflation, the weaker pound and interest rate increases, debt restructurings are becoming, and are expected to continue to become, more common.
Such restructurings are often achieved by a third-party lender releasing or materially amending all or part of its debt, which would result in taxable income arising to a UK corporate borrower unless a relevant exemption applies.
Dispute Resolution analysis: A Court, cost-managing a claim under s423 of the Insolvency Act 1986 has strongly criticised the level of anticipated costs reflected in cost budgets and have made an order reflecting the view formed.
Lemos and ors v Church Bay Trust Company Limited [2023] EWHC 157 (Ch)
What are the practical implications of this case?