How can I protect my company from cash flow problems due to outstanding payments?
It is well worth keeping a close eye on your customers to spot any early signs of financial distress and act quickly.
Establishing a debtor company’s Centre of Main Interests (“COMI”) is an important step for any creditor who wishes to begin insolvency proceedings within the UK. In the context of real estate finance, it is common for the different borrower-side parties to be incorporated in various jurisdictions and, in particular, for the borrower/propco to be a special purpose vehicle incorporated and registered outside the UK.
The High Court has held that a bank owed a duty of care to its customer when on notice that an agent acting for the customer was misusing his authority. In the case of Singularis Holdings Limited (in Official Liquidation) v Daiwa Capital Markets Europe Limited [2017] EWHC 257 (Ch), a bank was liable in negligence to its customer since it was on notice that its customer was at risk of being defrauded by its director but failed to stop payments made for the purpose of misappropriating funds of the company.
The Facts
The question of who is entitled to payment of compensation for PPI where a debtor has been discharged from his/her Protected Trust Deed (PTD) had given rise to conflicting judicial decisions in Scotland. In our previous article, we highlighted the uncertainty created following the decision of Sheriff Reid in the case ofDonnelly v The Royal Bank of Scotland (Donnelly) and the decision of Lord Jones in Dooneen Limited, t/a Mcginnes Associates and Douglas Davidson v David Mond (Dooneen).
Original news
Mikki v Duncan [2016] EWCA Civ 1312, [2017] All ER (D) 157 (Feb)
Summary
A bankrupt was found to be in contempt of court following years of failing to comply with the terms of multiple court orders compelling him to disclose information about his financial affairs with a view to entering into an IPOA.
The Facts
The Facts
Husband and wife petitioned for divorce in 2008. In January 2009, a statutory demand was served on the husband and a bankruptcy petition was presented in March 2009. In June 2009, husband and wife agreed a consent order whereby the husband was to make periodical payments to the wife and daughter and to repay around £1.4m to the wife.
Summary
The UK Court of Appeal recently confirmed that lawyers (Decherts) could no longer act for a company (Avonwick). Our views on the first instance decision can be found here.
Background
Kazakhstan Kagazy Plc v Zhunus [2016] EWCA Civ 1036 – Court of Appeal
A group of companies brought proceedings against their former chairman (“Mr Zhunus”), CEO (Mr Arip”) and former director (“Mr Dikhanbayeva”) for misappropriation of their assets.
It is standard market terms for a lender to have the express right to transfer its loan. In particular, English law governed syndicated loan documents will usually incorporate the Loan Market Association (LMA) wording (or similar) to this effect. Interestingly, the Court of Appeal has recently had to consider the scope for implying terms into such LMA-style language and whether to restrict a lender’s right to market the sale of the loan under those standard terms.