The Supreme Court’s judgment in BTI 2014 LLC v Sequana SA and ors^[1] (“Sequana”) is a key decision on the law surrounding directors’ duties.

The High Court was required to consider the Supreme Court’s Sequana judgment in Hunt v Singh (below).

What did we learn from Sequana?

We wrote earlier this year about the rise in insolvencies in the UK at the end of the summer, as persistent inflation, the pain of increasing interest rates, higher energy bills and the end of pandemic measures all took their toll.

In Lehman Brothers (PTG) Ltd (In Administration), the court considered whether to grant an order extending the administration of Lehman Brothers (PTG) Ltd (the “Company”) for a further two years and in doing so, provided some useful observations about when a court will grant an extension where a company is in distribution mode.

In the recent case of Re LYHFL Limited [2023] EWHC 2585 (Ch), the High Court has considered the proper interpretation of paragraph 12(1)(b), Schedule B1 of the Insolvency Act 1986, by which directors can apply to court for an order putting the company into administration.

Drawing on previous authorities concerning this and similar provisions, the Court concluded that an individual director has no power to make such an application without the approval of the majority of the company's directors and a valid board resolution.

Facts

The Consumer Duty is one of the most significant pieces of regulation to land in the financial services industry for some time and represents a major shift in how firms will need to view customer outcomes and proactively address harm in the retail market. For Insolvency Practitioners (IPs) appointed over a regulated firm that has products within the scope of the duty, this will form part of the regulatory obligations with which the firm (and the IP) will need to ensure compliance.

The well-publicised restructuring of the Galapagos group (the group) in 2019 spawned multiple challenges by stakeholders in the courts of a number of different jurisdictions. The latest decision of the English High Court considers the interpretation of the Distressed Disposal provision within an LMA-form intercreditor agreement (ICA) following a challenge by subordinated noteholders (the noteholders) to the validity of the release of their claims as part of the wider restructuring.

October found relief for both non-executive director’s and the D&O insurance market as the Carillion non-executive director 'test case' was abandoned the day before trial.

The recently reported decision of ICC Judge Greenwood in Grove Independent School Ltd, Re [2023] EWHC 2546 (Ch) (Grove) provides some clarity on the test to be applied by the court in deciding whether to exercise discretion to grant an order for a Part A1 moratorium. In this case, the company in question was also faced with a winding-up petition, presented by His Majesty's Revenue & Customs (HMRC).

December 2023

The Right of Set-off in Insolvency Proceedings

MAYER BROWN | THE RIGHT OF SET-OFF IN INSOLVENCY PROCEEDINGS

Judgments on claims for fraudulent trading (s 213 Insolvency Act 1986) do not come along every day: they are hard to make good. A recent example is, however, that of Charles Morrison (sitting as a Deputy Judge of the High Court) in Bouchier & Anor v Booth & Anor [2023] EWHC 3195 (Ch). It runs to 281 paragraphs and covers a wide range of law and fact.