Miles J’s judgment in Re Sova Capital Ltd [2023] EWHC 452 (Ch) will, like that of Jonathan Hilliard QC in Re Petropavlovsk Plc,be welcomed as a further example of the courts acting to assist insolvency practitioners selling assets in unusual circumstances.

Introduction:

On 5 October 2022, the Supreme Court delivered a landmark judgement in BTI 2014 LLC v Sequana SA [2022]. The decision is the first from the Supreme Court to address when, and in what circumstances, company directors owe a duty to consider the interests of the company’s creditors (‘’the creditor duty’’).

Although not directly concerned with directors' liabilities, the recent Supreme Court judgment in Stanford International Bank Ltd v HSBC Bank PLC provides further clarity on the circumstances in which a distressed or insolvent company may seek to make claims against its directors.

INTRODUCTION

The key aspects affecting directors' liabilities presented in the Supreme Court ruling are that:

At the end of February 2023, the High Court sanctioned seven restructuring plans for companies in the Lifeways group. Lifeways is a group providing supported living and specialist residential, support and care services at properties throughout the UK.

The case raised several interesting aspects, particularly in relation to the conduct of creditor meetings for a restructuring plan where cross class cram down is sought, and whether there is a read across from scheme case law on this issue.

The Part 26A Restructuring Plan (“RP”) is a relatively new addition to the English insolvency regime; despite this, the flexibility it provides to both distressed companies and their creditors has made it an important and attractive option. The recent administration of GoodBox Co Labs Limited (“GoodBox”) only further highlights this flexibility, providing ground-breaking precedent for creditor‑led RPs and the necessity of company consent.

KARL CLOWRY, SEÁN MCGUINNESS, AND AZIZ ABDUL LOOK TO THE LESSONS FOR SHAREHOLDERS, CREDITORS AND ADMINISTRATORS FROM THE FIRST CREDITOR LED RESTRUCTURING PLAN.

The Good Box Co Labs Limited (in Administration) case demonstrates once more the viability of the process for the mid-market and continues a trend of RPs being used by a determined creditor / shareholder constituency to rescue an equity investment within an existing corporate group. In short, the mid-market RP is still a highly situational, albeit flexible, tool."

The Supreme Court handed down its judgment on the case of Rakusen v Jepsen on 1 March 2023, deciding that rent repayment orders cannot be made against superior landlords.

The case considered whether rent repayment orders (RROs) under the Housing and Planning Act 2016, could be made against immediate landlords only, or whether superior landlords are also liable. 

簡介

英國和香港的法例均規定，債權人只可以就其應獲支付的算定金額提出破產呈請，但相關法例條文並無界定何謂「算定金額」（liquidated sum）。在Re Dusoruth (a bankrupt) Dusoruth v Orca Finance UK Ltd (in liquidation) [2022] EWHC 2346 (Ch) 一案中，英格蘭及威爾斯商業及財產法庭（「法院」）澄清，復還不當得利的申索不論如何確切，仍不能被視為算定金額，因此不能成為破產呈請的依據。

背景

申請人是一名商人，亦是在英國、英屬維爾京群島及馬爾他等多個司法管轄區註冊的多間公司的最終擁有人。他以其中一家公司進行欺詐，遊說富戶投資，然後透過無抵押貸款將資金轉移到他控制的其他公司。申請人被他其中一間正在清盤的公司（「答辯人」）基於以下債務提出破產呈請（「該破產呈請」），並於2020年11月被判定破產：

1.從答辯人的銀行帳戶支付，用於清償申請人的個人信用卡帳單的361,899.73歐元；及

Where a commercial property is sold by a receiver or insolvency practitioner (IP), VAT must be charged on the sale if the owner had exercised and properly notified an option to tax (OTT) in respect of the property. The IP acting on behalf of the seller needs to establish whether an OTT has been made and notified so that VAT is charged , if needed.  This can be difficult if company records are in disarray, directors of the insolvent company are non-cooperative and/or the IP or receiver has limited knowledge of the property and company.

Last year saw the construction industry face significant challenges, insolvency levels were up with over 5,000 company failures and nearly 23,000 companies in distress by the last quarter.

Construction businesses in the North-East had the second highest sector insolvency rates, with an estimated 540 companies suffering from distress in the last quarter of 2022 –  the highest of any sector.

This distress has now come to fruition with the recent insolvencies of two of the North East’s largest main contractors, Metnor Construction and Tolent Construction.