Creditors' Bankruptcy Petition

The rules for these petitions are contained in 10.6 to 10.33. This section also covers IVA supervisors making a petition. The good news is that under the new Rules, there are very few changes to the current procedure.

ECJ decides that rights in rem should be interpreted in accordance with German law, despite insolvency proceedings having been opened in France

In the recent case of SCI Senior Home (in Administration) v Gemeinde Wedemark, Hannoversche Volksbank eG, the Court of Justice of the European Union handed down judgment on the question of whether a right in rem created under national law should be considered a "right in rem" for the purposes of Article 5 of the Council Regulation (EC) 1346/2000 on insolvency proceedings (the "Insolvency Regulation").

Further to our updates in December and January, there has been a further development in relation to this case. The High Court heard the second adjourned hearing of the bankruptcy petition in relation to Glenn Maud.

The Department for BEIS has recently published a consultation to the UK's insolvency and corporate governance landscape including significant proposals to extend the liability of directors of holding companies that sell insolvent subsidiaries. 

Cambridge Analytica, the data analytics firm at the centre of the Facebook data scandal, is closing its doors and commencing insolvency proceedings. The company has been unable to recover from the bad press coverage and large legal fees in dealing with the aftermath of the Facebook data breach allegations.

Directors against whom claims for a misfeasance have been intimated often turn to limitation and set off in defence of a request for the repayment or restoration of the relevant sums or property.

Misfeasance and limitation

It has been held that full and frank disclosure was not provided to the Court by a Russian Liquidator in granting a Recognition Order in the UK, which resulted in the Recognition Order being set aside. The issue was determined despite the parties being in agreement that the Liquidator's claims should be withdrawn.

It was ordered that the Administrators could distribute to unsecured creditors, 8 years after Nortel entered Administration, so long as a reserve was maintained in relation to potential expense claims.

The out of Court appointment processes are broadly similar to the processes under the Insolvency Rules 1986 with some minor amendments. The most significant change is the abolition of the prescribed forms for appointment documents.

Whatever type of appointment (out of Court by company/directors, out of Court by Qualifying Floating Charge Holder ("QFCH"), application to Court), the Consent to Act form and contents is dealt with by r3.2.

Appointment out of Court by directors/the Company

This article was first published in Building Magazine, Issue 10, 10 March 2017.

Does an adjudication enforcement trump an insolvency moratorium? A recent case in the TCC has provided clear guidance on the issue.