It has been an interesting 12 months in the world of insolvency and restructuring.

In the recent case of HMRC v Munir & Others[1], HMRC successfully applied to the Court for committal of three company officers for contempt of court where an order appointing a provisional liquidator was knowingly breached.

 Background

Key Point

No recognition order was made where the main foreign insolvency proceedings had ended even where the plan agreed in those proceedings was in part still to be implemented.

The Facts

Key point

The Court of Appeal has recently given detailed guidance on what happens to the surpluses available in the insolvency of companies after dealing with an appeal in relation to the so-called Lehman Waterfall Application dealt with in an earlier Update.

Facts

Key point

A Court always has discretion whether to set aside a statutory demand based upon cross claims.

The facts

A debtor applied to Court to have a statutory demand set aside on the basis that he had a counter claim which, if set against the debt, would leave less than £750 outstanding. 

The decision

In a challenging economy bankruptcy increasingly stands accused of constituting a mechanism for debtors to escape their responsibilities at their creditors' expense. It understandably remains a live debate as to whether a bankrupt should be afforded the means of a protected pot of money for his future use while his creditors are left unrecompensed for their loss. The debate is not new, but the balance has perhaps shifted in a climate where creditor losses are felt particularly keenly.

The Pension Protection Fund (PPF) has issued a guidance note on Insolvency Practitioner remuneration which will apply where the insolvent company has a Defined Benefit Pension Scheme. The guidance note applies to pre and post appointment work.

The Guidance Note can be found here.

The Supreme Court has confirmed in Jetivia v Bilta that where a company brings a claim against its directors for losses caused by their wrongdoing, the directors cannot escape the claim by arguing that their actions are attributed to the company itself.

The Supreme Court also held that s.213 of the Insolvency Act, (which permits the Court to take action against those who  have conducted the business of a company in order to defraud creditors) was not jurisdictionally confined and applied to people and companies resident outside the UK.

The UK’s Pension Protection Fund (PPF) is about to publish new guidelines to reflect their increased focus on the approval of Insolvency Practitioner’s (IPs) fees. The guidelines require IPs to provide more regular detail of accruing and anticipated costs to the PPF when they are appointed over employers where Defined Benefit (Final Salary) pension schemes are significant creditors. More specifically IPs will now be required to provide a more detailed explanation of how their proposed remuneration reflects the value provided to creditors.

In general terms, section 110 of the Small Business, Enterprise and Employment Act 2015 (the 2015 Act) amends the provisions of the Company Director Disqualification Act 1986 (the CDDA 1986) in relation to directors’ disqualification.

One of the changes introduced is that the Secretary of State will be able to apply to the court for a compensation order against a director who has been disqualified where creditors have suffered identifiable losses from the director’s misconduct¹.