http://www.bailii.org/ew/cases/EWHC/Ch/2015/3721.html

Two insurance intermediaries entered into administration. Although heavily insolvent, they had significant funds held in client accounts. Those funds represented insurance premiums collected from customers but not yet paid on to the insurers. The issue therefore arose as to whether the insurers, the customers or the unsecured creditors of the intermediaries were entitled to those funds.

An update on recent changes

1 October 2015 – A day of changes to insolvency law

The start of October 2015 brought about important changes in insolvency law, affecting both creditors and debtors alike. The most notable changes are detailed below.

Harmonising office holder claims in administration  and  liquidation

In Lockston Group Inc v Nicholas Stewart Wood [2015] EWHC 2962 (Ch), the English High Court held that foreign currency claims and claims for interest in a deceased insolvent's estate should be calculated at the date of death, rather than the date of any insolvency administration order. This case serves as a reminder of the importance of the pari passu principle in insolvency law and the requirement for a single date for ascertaining a deceased insolvent's liabilities.

Facts

According to the UK Gift Card & Voucher Association, in 2014 the gift card and voucher market was worth £5.4 billion in the UK and $124 billion in the US. 

Gift cards can confer numerous benefits on the retailer, including promotion, working capital and additional profit from up-spend, and are popular with consumers as a method of paying for goods and services in advance of receiving them. 

As we have recently highlighted and discussed in depth elsewhere in relation to the UKCS (click here), the confidence of North Sea oil & gas contractors is at an all-time low.

The Insolvency Proceedings (Fees) (Amendment) Order 2015 (SI 2015/1819) which comes into force on 16 November 2015 is set to change the landscape on how creditors pursue debts.

The cost of presenting a bankruptcy or winding up petition will increase for petitions presented on or after 16 November 2015.  This is not welcome news to many creditors as the increase may result in smaller debts being harder to recover, forcing more claims to be issued through the Small Claims Court which can often be a lengthy process and not always cost effective.

The Pension Protection Fund (PPF) levy Determination for 2016/17 was published on 17 December 2015. It follows a consultation with PPF stakeholders which was launched in September this year. The levy Determination sets out the rules for calculating a scheme’s annual PPF levy. In our September Update we reported on the key changes which were being proposed as part of the 2016/17 consultation process.    

Nearly a third (30%) of South West retailers are at heightened risk of insolvency in the next 12 months, according to research by R3, the insolvency trade body. This is an increase of 5.5 percentage points  on the same time last year.

These figures are higher than the cross-sector percentage of businesses in the South West at higher than normal risk (26.5%). However, it is below the UK average insolvency risk for the retail sector (30.8%).

Alan Bennett, Chair of R3 in the South West and Partner at Ashfords LLP, comments:

The Enterprise Investment Scheme (EIS) can provide very significant tax relief for investors in unlisted companies but a recent case in the First Tier Tribunal (“FTT”) shows how strictly the rules of the Scheme are interpreted.

One of the many conditions of EIS relief is that the shares issued to the investor must not have any preferential right to a company’s assets on a winding up. The requirement is included so that an investor cannot obtain the tax advantages of EIS relief while being shielded from the economic risk of the investment.

The facts

8 fathom . AUGUST 2015 Shipping Case Digest |by Andrew Chiew Ean Vooi and Jennifer James Ilango| MV “Sanko Mineral” With the current downturn in the shipping industry, shipowner insolvency is often a concern. In the MV “Sanko Mineral” (the Sanko Mineral),1 we find juxtaposition between in rem proceedings in the Admiralty court and cross-border insolvency proceedings. (i) Tokyo insolvency proceedings In July 2012, the owners of the Sanko Mineral, Sanko Holdings (“Sanko”) entered into reorganisation proceedings under the Corporate Reorganisation Act in Japan.