The regulatory amendments drawn up by the Secretary of State for Work and Pensions following the outcome in Trustees of Olympic Airlines SA Pension & Life Assurance Scheme v Olympic Airlines SA have been drafted narrowly and may end up  protecting no one other than the beneficiaries of the Olympic Airlines pension scheme. 

The issue

Key Points

Where a sole director and shareholder of a company had breached fiduciary duties he could not ratify the breach if the company was insolvent;

Claims against the company in liquidation by dishonest assisting parties could not be set off under rule 4.90 Insolvency Rules against any liability they had in damages for that assistance.

The Facts

Key points

When deciding whether to grant an order that administrators may sell secured assets as if they are not subject to security the court will:

• carry out a balancing exercise as between the prejudice to the secured creditor and the prejudice which would be suffered in the administration; and
• protect the secured creditors' rights by ensuring that the assets subject to security were valued appropriately taking into account the circumstances of the administration.

Facts

This update considers the recent High Court decision in Thomasand Another v Edmondson (12/05.2014) concerning the court’s ability to make an income payment order against a bankrupt who is already subject to an income payment agreement.

The background

In the recent case Blue Monkey Gaming v Hudson & Others the High Court held that the responsibility of identifying and proving title to goods under retention of title clause falls solely on the seller, not the administrators dealing with an insolvency.

Background

This update focusses on Teresa Graham’s recent review on pre-pack administration published by the  Government which sets out areas for improvement and provides detailed recommendations to help better the procedure.

The background

Preamble

The COMI rules prevent a foreign based company from accessing the UK insolvency regimes, unless it has a sufficient connection with the UK. However, in Christophorus 3 Limited the High Court approved the ‘flipping up’ of a specially created UK newco in a German group to enter administration.

The background

The High Court described this case as ‘an elaborate scheme for the restructuring and refinancing’ of a German group.

The UK has long-since established itself as a jurisdiction of choice for complex cross-border restructurings involving corporate groups whose principal operations are overseas.

Most Landlords, and Insolvency Practitioners (“IP”s), will be well aware of the issues and liabilities that can arise where a tenant (whether it be a company or individual, residential or commercial) experiences financial difficulties. Competing interests can lead to difficulties for all parties and, potentially, legal disputes.

Overturning two significant recent decisions, the Court of Appeal has held that whenever a rent payment day falls, from the moment a company in administration beneficially retains property, it will ordinarily be liable to pay rent as an expense for the period of that beneficial retention.