The UK Parliament made an Order on 3 March 2020 which increases the prescribed part, payable to unsecured creditors from floating charge recoveries on the insolvency of a company from £600,000 to £800,000.
Back in August 2018, in its paper entitled “Government Response: Insolvency and Corporate Governance” (the 2018 Paper) the Government responded to its consultation on ‘Insolvency and Corporate Governance' with the announcement of several reforms and proposed next steps.
Last September we reported on the Court’s decision on the landlords’ challenge to the Debenhams CVA on grounds of unfair prejudice and material irregularity, in respect of which the landlords have now successfully obtained permission to appeal on various grounds (see below).
A recent English case has considered for the first time whether and if so to what extent the general duties of a director survive a company’s entry into an insolvency process.
Summary and Key Takeaways
Insolvency in the construction industry is unfortunately never too far away and it would be surprising if anyone, at least indirectly, who is reading this article has not been affected.
In June 2019 the Government announced a plan to introduce a new “breathing space” scheme to protect individuals and families struggling with problem debt and to give those individuals and families extra help and time to get their finances under control.
The Pension Schemes Bill 2019 is causing a marked degree of consternation in the restructuring community. The proposed legislation introduces new offences that can be prosecuted in the criminal courts and further moral hazard powers that are likely to significantly reduce the directors’ and insolvency practitioners’ ability to provide commercial and creative solutions to creditors of financially stressed companies.
At clause 107, the Bill introduces two new criminal offences and below we address the concerns these cause:
Actions taken to seize control of a securitisation structure and the underlying loan portfolio declared void and of no effect.
Two recent High Court cases, Business Mortgage Finance 6 Plc v Greencoat Investments Limited and others [2019] EWHC 2128 (Ch) (the Greencoat Case) and Business Mortgage Finance 6 Plc v Roundstone Technologies Ltd [2019] EWHC 2917 (Ch) (the Roundstone Case) (together, the Business Mortgage Cases), have affirmed a number of principles relating to securities held through the clearing systems and the powersof receivers, including the following:
Many readers will be aware of the recent, sudden closure during service of Mayfair restaurant “The Square”, which left staff out of work and out of pocket after January’s wages remained unpaid.
Sadly this is by no means an isolated example, as every year thousands of bars and restaurants ‘go under’, but there are steps you can take to protect your position as an employee.
Keep Informed
Not all employers keep their staff updated on the financial health of the company, particularly when its struggling.
Alternative assets have enjoyed an unprecedented level of growth over the last decade, which looks set to continue with global AUM growing from $8.8tn in 2017 to a projected $14tn in 20231.