This is often a question for faced by office-holders of insolvent companies when investigating a company’s affairs, and more of a concern for former directors and shareholders when potentially facing a claim for the return of unlawful dividends or misfeasance.
The Directors of a Company that cannot pay its debts can choose to put the Company into voluntary liquidation. Indeed Directors have statutory responsibilities not to permit a Company to trade insolvently. If they allow the Company to trade insolvently they can become personally liable for the debts.
A creditor can also put a company debtor into compulsory liquidation. The amount owed must be not less than £750 and the creditor must either have an admission that the debt is owed, or a Court judgment.
- Introduction
On 9 May 2019 the Airline Insolvency Review (the AIR), chaired by Peter Bucks, published its Final Report on passenger protections in the context of airline insolvencies, having been commissioned by the Chancellor of the Exchequer in November 2017 following the high-profile collapse of Monarch Airlines.
With the introduction of electronic filing which allows parties to file documents at court 24/7 we consider the recent case of Wright v HMV Ecommerce Limited (2019) in which the court was asked to confirm whether administrators were validly appointed following the directors filing a notice of appointment after the court office was closed.
The Electronic Working Pilot Scheme (“EWP“) Practice Direction came into effect in 2015, initially in the London region. It now applies in all Business and Property Courts in England and Wales from 30 April 2019.
The below is a quick snapshot of three recent tax-related developments in the insolvency and restructuring sphere.
Farnborough – appointment of a receiver and tax grouping
Does termination of a contract before the works are complete impact an employer’s ability to recover liquidated damages? This question was recently considered by the English Court of Appeal. The answer? It depends on the terms of the contract. However, it seems that many liquidated damages provisions, including those in currently used standard form construction contracts, may not apply at all on termination of the contract, leaving employers to prove a claim for general damages for delays suffered both before and after termination.
Introduction
The UNCITRAL Model Law on the Recognition and Enforcement of Insolvency Related Judgments (‘the New Model Law’) is intended to fill the gaps that currently exist in cross-border conventions as they apply to the recognition and enforcement of judgments in insolvency proceedings.
Judgment was handed down in the High Court this morning, in a case where recognition of a winding-up of a solvent foreign investment fund was granted under the Cross-Border Insolvency Regulations 2006 ("CBIR").
This is the first time that the English Court has examined in detail the UNCITRAL Model Law on insolvency and the interplay with its Guides to Enactment, as well as case law from various jurisdictions concerning its application to solvent scenarios. Mrs Justice Falk found that:
The below is a quick snapshot of three recent tax-related developments in the insolvency and restructuring sphere.
Farnborough – appointment of a receiver and tax grouping
The recent case of Re J T Frith Ltd [2012] EWHC 196 (Ch) shows:
- how secured lenders may surrender their security in order to participate in the prescribed part available for unsecured creditors on insolvency; and
- how intercreditor deeds may be worded to allow senior secured creditors to participate in the prescribed part, despite retaining their security.
Background