A CVA was introduced as one of the rescue arrangements under the Insolvency Act 1986. It allows a company to settle unsecured debts by paying only a proportion of the amount owed, or to vary the terms on which it pays its unsecured creditors. Whilst a CVA only requires approval of a 75% majority of the creditors by value, it binds every unsecured creditor of the company, including any that voted against it or did not vote at all.
The liquidator of Onslow Ditching Ltd (ODL), sought a declaration against two directors (on three grounds), seeking damages/fines or a contribution of assets from each director for:
It is an age old problem for creditors who are faced with debtors who ask for more time to pay their debts. The Civil Procedural Rules (CPR) 14.9 and 14.10 allow for a debtor, following the admission of their debt, to request time to pay. It is open for a claimant to choose whether or not to accept a defendant’s proposals; if the claimant does not accept the defendant’s proposals, it is for the court to determine the time and rate of payment. The court’s discretion conferred by CPR 14.10 to extend time for payment has not, until now, been examined.
In the recent case of Pressure Coolers Ltd v (1) Mr J Molloy; (2) Maestro International Limited; and (3) Secretary of State for Trade and Industry, the Employment Appeal Tribunal had to decide who should pay an employee’s basic award and notice pay following his unfair and wrongful dismissal after a “pre pack” TUPE transfer from his insolvent employer.
When action is taken against a receiver with a right to indemnity from the assets received, that receiver can indemnify himself, even if the action is brought after the receiver has been discharged.
Proposals issued October 2010
Confirmation given 31 January 2011
Policy statement issued May 2011
Draft guidance on the bespoke measurement of investment risk issued May 2011. Consultation ends on 24 June 2011
Consultation on the 2012/13 levy determination expected in autumn 2011
The PPF has confirmed its intention to implement a new levy framework from 2012/13. Key features of the framework confirmed in the policy statement include:
The Government is proposing to amend (for a twelfth time!) the Regulations under s75 Pensions Act 1995. The amendments would make it easier to vary the basis on which liability is shared between employers.
Background – the Regulations as they stand
This briefing looks at the options available to directors in the winding up of a solvent company.
- Introduction
Most reading this will know that freezing orders are granted to prohibit defendants from disposing of or dissipating their assets in a way that will prevent the claimant from enforcing any judgment he obtains. If the defendant disobeys, he is at risk of contempt. But the primary purpose of contempt is to punish the defendant. Many claimants will simply be concerned to ensure that the defendant’s money is frozen.
The Sinclair v Versailles1 decision has extinguished any prospect that a victim of a fraud has a proprietary claim to a fraudster’s secret profits. It also offers significant comfort to banks, insolvency practitioners and other potential recipients of trust funds by setting a high bar for whether a recipient person is “on notice” of a proprietary claim to those funds.