On 21 May 2010, Justice Floyd handed down his judgment in Bloomsbury International Ltd (in administration) v Mark Alan Holyoake.1 The case sheds light on the circumstances in which it is appropriate for a cross-undertaking provided by administrators on behalf of an insolvent company to be fortifi ed by a bank guarantee.
Facts
In our e-update of 20 January 2010, we looked at a decision of the English courts from December 2009 in which it was decided that, in England, the Administrators of a tenant company are bound to account to the landlord of premises for rent due in relation to the period during which those premises are being used in connection with the administration, and that the rent is to be paid as an expense of the administration.
Background
The recent descision of BNY v Eurosail1 is an important modern descision on the blance sheet test for insolvency.
Treasury is consulting on implementation of the changes to the Settlement Finality Directive (SFD) and the Financial Collateral Directive (FCD) in the UK. The changes to the Directives cover:
In light of recent reports released to the market, a lender in the leveraged loan market would be forgiven for indulging in some cautious optimism. New-issuance in July aggregated to €9.5 billion - a 13-month high. The year-to-date leveraged buy-out volume of €10 billion (38 deals) compares favourably with the €2.2 billion of volume (13 deals) for the same period in 2009. Against this backdrop, however, lenders should consider the recently released statistics from the Insolvency Service, and other economic data, which suggest that the economic outlook remains uncertain.
The Court of Appeal uses common law principles to allow direct enforcement.
The past eighteen months have seen a marked increase in the use of the Company Voluntary Arrangement (“CVA”) by retailers to reduce their lease liabilities and win the release of onerous parent company guarantees, with several high street names going through the process. Although this practice received cautious support from landlords, real concern continues to be voiced over the practice of “guarantee stripping”.
On 8 July, the Pensions Regulator’s Determinations Panel published a determination to issue a financial support direction against 25 companies in the Nortel group in Canada, the US, Europe and Africa.
The Court of Appeal1 has ruled that foreign judgments in insolvency proceedings may be enforced by the English courts at common law, and that the ordinary principles which may prevent the enforcement of foreign judgments do not apply to insolvency judgments where the action from which the foreign judgment arises is integral to the collective nature of the insolvency proceedings.
Facts