Summary: The Public Administration and Constitutional Affairs Committee's findings in relation to Kids Company serve as a reminder of the risks of insolvency to large charities. The inherent weaknesses in the demand-led 'self-referral' operating model resulted in little to no reserves, and ultimately led to the trustees being required to file a petition to wind up the charity. Trustees of large charities must always be mindful of reserve levels.

The Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act) will finally come into force from 1 August 2016.

The Act improves the rights of claimants who have a claim against an insolvent company or individual to directly claim against the insolvent party’s insurer.

In particular, the 2010 Act brings about the following important changes:

The 2010 Act has now been updated by regulations (the Third Parties (Rights against Insurers) Regulations 2016) to reflect changes in insolvency law. Accordingly, the long-awaited 2010 Act will finally come into force on 1 August 2016.

It will be recalled that the 2010 Act is intended to make it easier for third party claimants to bring direct actions against (re)insurers where an insured has become insolvent. The key changes coming in are as follows:

Julian Kenny QC appeared for the Appellants in the Supreme Court who handed down judgment 11 May, a much anticipated ruling by shipowners and subsidiary companies affected by the OW Bunker collapse.

The judgment affirms the rulings of the Court of Appeal and of first instance Judge, Males J, that a contract for the supply of bunkers that a shipowner had entered into with a subsidiary of the now insolvent OW Bunker company was not one to which the Sale of Goods Act 1979 applies.

Retailers BHS and Austin Reed have recently gone into administration, leaving 11,000 and 1,200 jobs respectively at risk. In such uncertain times, what rights do affected employees have?

What is administration?

As we reach the 30th anniversary of the Insolvency Act 1986, the legislators have clearly decided it is time to dust the profession down and bring out a shiny new model for us to hop aboard and take a journey (for some) into the unknown.

But what do all these changes mean in practice, and is there any theme running through them?

Fee regime

Only a month ago we were singing the praises of the CVA and calling them the saviour of the high street following the creditors’ approval of the BHS CVA. (See our earlier blog Move over Mary Portas, CVA’s are the real saviour of the High Street).

The Companies Court has set out the requirements necessary to serve out of the jurisdiction under the Practice Direction on Insolvency Proceedings.

Key points

Lenders and proposed administrators should ensure that permission is in place where permission of prior charge holders is required for the grant of new security.

The facts

Key points

Creditors petitioning for bankruptcy must carefully consider offers to settle debts and make a reasonable decision based on the circumstances.

The facts

A bankrupt sought permission to appeal his bankruptcy order on the basis that the Deputy District Judge incorrectly held that the petitioning creditor did not act unreasonably in rejecting the bankrupt’s offer to compound the debt and, therefore, ought to have dismissed the petition pursuant to Section 271(3) of the Insolvency Act 1986.

The decision