The Restructuring, Insolvency and Bankruptcy Group considers the English law position.

Wrongful Trading

This summer has seen several pension issues making the news. They show how essential it is for employers and trustees to keep abreast of how developments impact on their arrangements.

Jay Doraisamy looks at five areas which have made the headlines this summer:

BIS and Treasury have published their response to the consumer credit elements of the Government review of consumer credit and personal insolvency. The response explains the initiative that will ensure that over 85% of customers with personal current accounts will see clearer, fairer and more manageable charges for unarranged overdrafts. Customers will be able to get alerts when their balance is low and will not incur a fee if they exceed their limit by a small amount. Also, from late 2013 there will be guaranteed account switching within seven days.

Treasury makes banking insolvency rules: Treasury has made insolvency and administration rules covering building societies in England and Scotland and amended the English rules on banks in insolvency and administration and the Scottish rules on banking insolvencies. The English rules, among other changes, provide for the statement of proposals to be sent to FSA and FSCS and for the disapplication of set-off for protected deposits up to FSCS's statutory limit. The Scottish instruments apply to insolvencies of banks and building societies under the Banking Act 2009.

Re Stanford International Bank Limited and others [2009] EWHC 1441 (Ch) provides answers to key questions on the UNCITRAL Model Law on cross-border insolvency. What will courts recognise as a “foreign proceeding”? What types of insolvency practitioners will qualify as “foreign representatives”? Is a company’s “centre of main interests” (COMI) always in the country of its registered office? Linda Ralli considers the practical implications for banks which have lent to foreign companies where they are looking to enforce in England.

Facts

What are the principal types of insolvency proceedings?

Since our last newsletter, Russia's war in Ukraine rumbles on, domestic inflation hits new highs and there are signs of an increase in activity in the insolvency market. Russians unlawful assault on Ukraine continues unabated, as we enter the European summer months, and the fourth month of the invasion. Besides the utter devastation inflicted on the people and infrastructure of Ukraine, the war is having a significant impact on both global food and oil prices.

High Court orders the liquidation of CBL Insurance

In the UK case of CFL Finance Limited v Rubin and Ors, a creditor had sought to make an individual bankrupt. A creditors' meeting was held.  At the meeting, a proposal for an Individual Voluntary Arrangement was approved by the creditor that held the largest portion of debt (and therefore 90.43% of the vote).  The other two creditors voted against the proposal.

PricewaterhouseCoopers (PwC) v Saad Investments Company Limited (SICL) and Singularis Holdings Ltd (SHL)involved an application by PwC for the setting aside of orders made by the Supreme Court of Bermuda in favour of the liquidators that required the production of documents relating to SICL and SHL.  Included among the grounds on which PwC relied to set aside the order were that: