An unfortunate but inevitable consequence of the economic downturn induced by COVID-19 is that an increasing number of construction companies will enter into insolvency. In Bresco Electrical Services Ltd (in liquidation) v. Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25, the Supreme Court has provided some respite to contractors in liquidation by finally confirming their unfettered right to refer construction disputes for resolution by adjudication.
Receivables financiers, lenders taking security assignments over contractual rights, participants in the secondary loan market and others have an interest in:
On 25 May, the Insolvency Service published a consultation paper on options for reform of the UK's corporate insolvency regime. Their impetus is for the UK to remain at the forefront of insolvency best practice to ensure businesses, investors and creditors remain confident that best outcomes can be achieved when faced with financial difficulty, and to give a company the best possible chance to restructure its debts and return to profitability while protecting employees and creditors.
Schroder Exempt Property Unit Trust and another v. Birmingham City Council [2014] EWHC 2207
Summary
A landlord is liable for business rates where a tenant's lease is disclaimed, even if the landlord does not take possession of the property following a disclaimer.
Background
FSA has launched a consultation and discussion paper on proposals to bring the Client Assets Sourcebook (CASS) in line with EMIR. More generally, it wants to make CASS client money pooling provisions more flexible and address the problems identified during the Lehman and MF Global insolvencies.
The proposals cover the following:
FSA has published an undertaking Legal & General has given under the Unfair Terms in Consumer Contracts Regulations (UTCCR), in relation to its home insurance policies. It held that certain critical expressions in the policy were potentially so wide that it was hard for a customer to know what was excluded. The insurer agreed to make its wording easier to understand. (Source: FSA Publishes Insurance UTCCR Undertaking)
Treasury has published the 12 responses it received to its consultation on a special administration regime for investment firms resolution and draft legislation that takes into account its views on the responses. One Order clarifies that the definition of “client assets” includes money, but not money held in respect of insurance mediation. The other sets out the new regime. Respondents broadly supported the proposals and favoured an approach that would require the return of all client money and assets, not just segregated ones.
The Commission has agreed a plan to split Northern Rock into two banks, a “good” and a “bad” one. The “good” bank will carry on the economic activities of Northern Rock and the “bad” one will be an asset management company that will run down the remaining business. The Commission found the UK Government had kept state aid to a minimum in planning the restructuring. Treasury is pleased with the approval, which it says will allow Northern Rock to return to the mortgage markets while the back book of mortgages is managed separately.
Executive summary
On 26 June, the long-awaited Corporate Insolvency and Governance Act 2020 became law providing the UK (but with separate provisions for Northern Ireland) with temporary and permanent changes to insolvency law aimed at helping businesses manage the economic implications of COVID-19 including:
Permanent measures