Following on from our earlier advice on enforcing money judgments, Walker Morris’ banking litigators answer some more frequently asked questions.

Client Question 3

I have heard that I can enforce a money judgment via a third party debt order or an attachment of earnings.  What are these and what are the advantages/disadvantages?

Walker Morris Answer

Directors of companies incorporated in England and Wales must be mindful of their duties and responsibilities to the company as well as the potential personal liability that could arise from breaching those duties and responsibilities in the context of an insolvency.

With the current financial difficulties faced by the oil & gas industry, this issue is especially pertinent to that sector.

The High Court in London gave judgment on parts A and B of the Lehman Waterfall II Application on 31 July 2015.  The application is part of the ongoing dispute as to the distribution of the estimated surplus of more than £7 billion in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).

On 31 July 2015, the English High Court delivered its judgments in the ‘Waterfall IIA’ and ‘Waterfall IIB’ cases. The decisions are important to stakeholders in determining key questions about how, following payment in 2014 of all the provable claims, the estimated £7.39-billion surplus (the ‘Surplus’) in Lehman Brothers International (Europe) (in administration) (‘LBIE’) will be shared amongst them. For others, the decisions may be of general interest in probing some rarely aired legal issues relating to the lower levels of the insolvency payment waterfall.

In recent times, the legal profession has undergone widespread changes at the bequest of previous governments. The most draconian measures have been in relation to the expense of professional services. These include a budgeting and costs management process which is the subject of judicial approval. In essence, service provider’s fees and expenses are estimated and capped in advance of them being incurred.

Summary

On 12 May 2015, the English High Court provided guidance on the interpretation of the Loss provision under the 1992 ISDA Master Agreement in its judgment in Fondazione Enasarco v Lehman Brothers Finance S.A. and another [2014] EWHC 34 (Ch). The judgment will be of interest to participants in the derivatives markets as it provides:

New guidance from the Pension Protection Fund (PPF) regarding pre-packaged administrations (pre-packs) outlines their approach to pre-packs when the same insolvency practitioner (IP) proposes to continue as office holder in any subsequent liquidation or company voluntary arrangement (CVA).

ASTRA RESOURCES PLC V CREDIT VERITAS USA LLC [2015] EWHC 1830 (CH)

It is trite law that the court will grant an injunction restraining the advertisement of a winding-up petition where the petition amounts to an abuse of process.

E: BW ESTATES LTD; RANDHAWA AND ANOTHER V TURPIN AND ANOTHER [2015] EWHC 517 (CH) (“RVT”)

This decision followed an application by creditors (“the Randhawas”) of BW Estates Ltd (“the Company”) against the administrators of the Company that their remuneration should be deemed excessive and either disallowed entirely or reduced to such extent as the court thought appropriate.

The Facts

Over the last seven months there has been a spate of cases dealing with the relationship between arbitration law and insolvency law.

Winding-up petitions and arbitration clauses