The recent case of Re Ralls Builders Limited has confirmed that in circumstances where the company is heading for liquidation directors cannot escape a wrongful trading claim by ignoring individual creditors. It emphasises the importance of taking the correct legal advice at an early stage.

​On 12 February 2016 Snowden J handed down his judgment in Indah Kiat International Finance Company B.V. [2016] EWHC 246 (Ch). Indah Kiat International Finance Company B.V. ("Indah Kiat"), part of the global Asia Pulp & Paper Group (one of the world's largest pulp and paper manufacturers), applied for an order convening a meeting of scheme creditors to consider and, if thought fit, approve a proposed scheme of arrangement (the "Scheme") under Part 26 of the Companies Act 2006.

A possible alternative to the freezing injunction.

A judgment has recently provided helpful guidance on a creative form of injunction. The “notification order” compels a defendant to give notice to the claimant before disposing or dealing with its assets. This notification order is less onerous than a freezing injunction, and although it usually accompanies the freezing injunction, in this case, the order was issued as standalone relief. The notification would alert the claimant to apply for a freezing injunction prior to dissipation of any assets.

The decision of the High Court inVanquish Properties (UK) Limited Partnership –v- Brook Street (UK) Limited provides a stark reminder of the strict requirements for serving a valid break notice and the traps into which the unwary can easily fall.

The actuary is not required to consider the security of benefits where a bulk transfer without member consents is proposed, the Court has decided.

A transfer without consent cannot be made unless the actuary certifies that, in their opinion, the past service rights each member will be credited with in the receiving scheme will be "broadly no less favourable" than their rights in the transferring scheme.

A proposed shakeup of the UK’s corporate insolvency regime will impose a three month freeze on legal action against stressed businesses who are investigating rescue options.  In addition to this moratorium, measures have been suggested to help businesses to continue trading through the restructuring process.  The intention is that this will prevent struggling companies being held to ransom by key suppliers, and will also assist in developing flexible restructuring plans.  The proposal would make rescue schemes binding, even on secured creditors.

In June 2016, after a period of experimentation, the SFO promulgated an amended set of policies concerning the exercise of its power to conduct compelled interviews under Section 2 (s2) of the Criminal Justice Act 1987 (CJA). Part of this package is a document entitled “Presence of an interviewee’s legal adviser at a section 2 interview”. This expounds the SFO’s view as to their proper role whilst attending a s2 interview with their interviewee client.

First published in the International Arbitration 1/3LY, Issue 7

Insolvency law contains summary processes for dealing with claims and protections against certain proceedings commencing or continuing. There has been some debate, and recent case law, concerning the primacy of these rules over agreements to arbitrate. In the following article, we look at what the current position is under English law and beyond.

General position under English law

Facts

Longmeade went into compulsory liquidation. The liquidators were advised that the company had a good claim against BIS. The liquidators has secured third party funding in respect of the claim, which if successful, would double the dividend for creditors. However, 99% by value of the creditors of the company opposed the commencement of an action against BIS. The position of the few remaining creditors was unclear. The liquidators applied to the court for directions as to whether to cause the Longmeade to pursue the claim.

Held 

Tata Steel Limited (Tata) has been intending to end their British operations for some time. As yet, it has been unable to do so as its subsidiary, Tata Steel UK (TSUK), is the principal employer of one of the UK’s largest defined benefit (DB) schemes. The obligations and liabilities under the British Steel Pension Scheme (BSPS) have been deemed by prospective buyers as too great to take on with the Scheme currently running at a deficit of approximately £700 million.