There have been a number of smoke signals in the last few months around the increase of consumer debt in the UK and a focus on those firms providing consumer credit across the credit spectrum but particularly in the "sub-prime" or "near-prime" space.

Since the credit crunch, a number of consumer credit businesses have stepped in to fill a gap in the lending market. They give sub-prime or near-prime borrowers, who may find it difficult to obtain credit from traditional sources, with high-cost, short-term credit - instant access to funds.

Case Alert ‐ [2017] EWHC 2597 (Comm)

Court confirms insurance policy exclusions are not construed narrowly/scope of an insolvency clause

The claimants brought a claim under the Third Parties (Rights against Insurers) Act 1930 against the professional indemnity insurers of their financial adviser. The adviser gave allegedly negligent investment advice in respect of bonds issued by a company which then went into liquidation (and so defaulted on payments due to the claimants).

In a recent High Court decision, the court found that interim dividend payments made to a director were salary payments and not unlawful dividends/transactions at undervalue. This decision could make it more difficult for liquidators to recover sums from directors who do not have particular legal or accounting expertise.

Background

Summary

I previously considered this subject in a blog in November 2014, which can be found here. I had been faced with the problem of an insolvent company in the context of an injury claim arising out of an occupier’s liability accident in Cornwall. Whilst staying in a hotel my client had suffered a nasty injury to her ankle, The hotel was run by a limited company which went into liquidation during the case.

The Court of Appeal in London today gave judgment on Parts A and B of the Lehman Waterfall II Appeal, as part of the ongoing dispute as to the distribution of the estimated £8 billion surplus of assets in the main Lehman operating company in Europe, Lehman Brothers International (Europe) (LBIE).

Court of Appeal judgment: Burlington Loan Management and others v Lomas and others (as the joint administrators of Lehman Brothers International (Europe) (in administration)) [2017] EWCA Civ 1462

Summary and background

On 24 October 2017 the Court of Appeal handed down its decision in what has become known as the Waterfall IIA and B litigation (Burlington Loan Management Limited and others v Lomas and others [2017] EWCA Civ 1462). The decision also covered an appeal of one point from the High Court Waterfall IIC decision.

Alan Bennett and Crispin Jones successfully acted for Mr Dowling in his application to set aside a Statutory Demand served on him by Promontoria (Arrow) Limited ("Promontoria") in the sum of €6,338,675.93. The decision has wide reaching implications for creditors seeking to rely on guarantees.

A recent Court of Session case has made clear that a Scottish court cannot wind up or make an administration order in respect of an English registered company, and the same applies to English courts and Scottish companies.