Licensors of intellectual property rights may soon be unable to terminate licences where the licensee has gone into an insolvency process.
What are ipso facto clauses and why do they matter?
The facts
A liquidator pursued a claim against a former director of a company, that the transfer of the company’s trading inventory in satisfaction of money owed to the former director was a transaction at an undervalue and/or a preference.
An attempt was made to grant floating charge security over the inventory, which the court found was void as it was granted for existing liabilities, at a time when the company was insolvent, to a connected party.
Key point
In certain circumstances the court will look to parallel statutory provisions where existing applicable statute does not accommodate the situation, as long as the latter is not offended, expanded or altered by doing so.
The facts
This application for directions was brought by the administrators of Lehman Brothers Europe Ltd (the “Company”) on:
The Insolvency Service's report on the impact of CVAs on commercial landlords, particularly in the retail and casual dining sector, follows concerns from landlords that compromises are unfairly affecting them. The research was based on 59 CVA proposals.
Key findings
On 29 October 2021, the UK Insolvency Service published its insolvency statistics for Q3 2021. Notably, the number of company insolvencies was 17% higher than in Q2 2021 and 43% higher than in Q3 2020. This was driven by an increase in company voluntary liquidations (CVLs) to the highest quarterly level for 12 years.
Duty of care in tort not established in favour of main contractor from third party sub consultant
In addition to new legislation mentioned elsewhere in this round-up (see links to other sections), commercial and tech businesses and in-house counsel should note:
The Corporate Insolvency and Governance Act
How do you safeguard your interests if you find yourself dealing with a company that enters an insolvency process or is at risk of insolvency, whether as a contract counterparty or in a dispute? Conversely, if you find prospective contract counterparties raising concerns about your company's solvency, what protections might you be able to offer your counterparty in order to continue the relationship?
Key points
To attribute a director’s fraud to a company, the company must be a one-man company
A one-man company requires no innocent directors or shareholders
The Facts
Singularis Holdings Ltd (the “Company“) was set up to deal with the personal assets of Mr Al Sanea. Mr Sanea was at all the times the sole shareholder of the Company, though he was only one of a number of directors of the Company.
Key points
Court reiterated circumstances in which it will sanction a proposed course of action by administrators
Requirement that the course of action be “particularly momentous”
Court sanctioned proposed settlement in the circumstances
The Facts