One of the temporary measures that was not extended was the disapplication of the wrongful trading rules of section 214 of the Insolvency Act 1986 as regards the personal liability of company directors. The discontinuation of the temporary protection has been criticised by business and most recently by the Institute of Directors (IoD) which commented that "Failing to extend the suspension of wrongful trading rules was a mistake. Without this protection, the pressure is on directors to simply shut up shop when faced with difficulty". Is that concern justified?

On 8 October 2020, the Insolvency Service published the outcome of its review of industry reforms to pre-pack sales in administration and made recommendations which will impact the way in which pre-pack sales to connected parties in particular operate in the UK in the future.

Speed read

Insolvency legislation has been coming thick and fast in recent months, and this time it's pre pack sales to connected parties that are facing further scrutiny.  

The concern is that the voluntary measures which were put in place a few years ago have not provided enough transparency so new legislative measures are on the horizon. On 8 October the UK Government published a set of draft Regulations which will tighten up the processes around pre-pack sales to connected parties.

What is a pre pack?

The past year has seen some important judgments and hearings (with judgment awaited at the time of writing) on several subjects, some of which may shape the future of UK litigation for years to come. Litigants and litigators have also spent a good part of the year getting used to a new way of conducting litigation—remotely and fully electronically. Starting with contract law, while there has been little by way of Supreme Court guidance on the subject, the lower courts continue to issue interesting judgments.

The English courts are known for being pro-arbitration. In the recent case of Riverrock Securities Limited v International Bank of St Petersburg (Joint Stock Company) [2020] EWHC 2483 (Comm) the English High Court has granted an anti-suit injunction in relation to claims being made in foreign bankruptcy proceedings, where the underlying agreements included arbitration provisions with a London seat.

The parties

OVERVIEW

This article was first published in International Corporate Rescue by Chase Cambria

When a business is distressed and is due to run out of cash, advisors are often called upon to carry out an accelerated M&A process. Whilst there may be scope for the process to be run on a solvent (share sale) basis, it may need to be implemented on an assets basis, often via a formal insolvency process. Because of the undeniable threat of insolvency, directors of distressed businesses should obtain specialist legal advice on their duties at the earliest possible stage.

Board considerations

In this article we will cover the notice requirements for an out of court administration appointment by a company or its directors, and look at the recent case of Re Tokenhouse VB Ltd (Formerly VAT Bridge 7 Ltd) [2020] EWHC 3171 (Ch).

The notice requirements

Being a director is not just about managing and controlling a business; it also involves taking on certain legal duties and obligations. Directors get the benefit of limited liability, but directors' duties impose certain obligations to ensure they act in the best interest of the company, its employees, shareholders – and in certain circumstances, its creditors too.

On 8 October 2020, the UK government published a report reviewing voluntary measures introduced in 2015 to improve the transparency of pre-pack sales in administration.