Tag Archives: debts

Government proposes legislation to enhance UK insolvency regime

On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include: the ability for all companies to apply for a moratorium a new insolvency process – the “restructuring plan”, enabling companies to cram … Continue Reading

Future EU Regulation proposed to address conflicts of law on the assignment of receivables

On 12 March 2018 the European Commission published a proposal for a Regulation to govern the law applicable to the third-party effects of assignments of claims (the “Assignment Regulation”). The proposal of the Assignment Regulation adopted by the European Commission deals with which law applies to determine the effectiveness and perfection of the transfer of … Continue Reading

Professional firms – in the fee firing line again

In the last week we have seen MPs criticise accountancy firms, KPMG, Deloitte, EY and PWC in their first report on the collapse of Carillion, describing the big four as “a cosy club” and calling for the firms to be forcibly broken up.  Whilst not suggesting that the firms were to blame for the collapse, … Continue Reading

Tax abuse and insolvency – an HMRC consultation

HM Revenue & Customs (“HMRC”) has issued a consultation entitled “Tax Abuse and Insolvency: A Discussion Document” on how it proposes to confront those who misuse insolvency law as a means of avoiding or evading their tax liabilities. HMRC often describes itself as an “involuntary creditor” because it does not choose to trade with debtors. … Continue Reading

Is the UK insolvency regime equipped for the current political and economic climate?

An effective and well-equipped insolvency and restructuring regime gives confidence to investors and financiers, enabling credit to flow through to businesses and boost economic activity, growth and innovation. In 1999, following the Asian financial crisis, the World Bank carried out a review of the international regimes to establish a set of key principles for effective … Continue Reading

Retail CVAs – update for landlords

Carpetright, the UK flooring company, has announced that it is considering a Company Voluntary Arrangement with the aim of “rationalising the company’s property portfolio in order to improve the long-term prospects of the business”.  This is expected to enable the business to close unprofitable shops and reduce their rent bill.  With 409 shops across the … Continue Reading

German Court rejects the “bow wave theory” (“Bugwellentheorie”) in test for company illiquidity

Under German law, there are strict legal obligations for the managing directors of an insolvent company to file for insolvency. Failure to comply exposes a managing director to civil and criminal liability. It is therefore important for managing directors to know how to test whether their company is insolvent. One of the legal reasons for insolvency … Continue Reading

Parent guarantees in the insolvency of a German subsidiary – claw back risks

A recent ruling of the German Federal Civil Court (Bundesgerichtshof (“BGH”)) is a reminder of the risks which shareholders of a German company can face in an insolvency of their German subsidiary. Under the German Insolvency Code (“InsO”), claims for repayment of a loan granted by a shareholder who holds more than 10% of the … Continue Reading

The ongoing deconstruction of Carillion

Media attention has waned from the initial deluge of front-page headlines regarding the Carillion collapse. It would therefore be easy to be ignorant of the ongoing disintegration of the web of Carillion companies beneath Carillion Plc, the ultimate parent company of the Carillion group, which (according to its latest accounts) holds interests in over 350 subsidiaries … Continue Reading

Carillion’s Insolvency – How to Protect Yourself

Following our post on the failure of Carillion yesterday, Ray O’Connor of our Construction team has written the following article “Carillion’s Insolvency – How to Protect Yourself” which looks at practical ways forward for any sub-contractor, employer/developer or funder involved in a project with Carillion. In the event any advice is required on any issues … Continue Reading

The deconstruction of Carillion

On 15 January 2018, Carillion, the UK’s second-largest builder and one of the Government’s largest contractors, was placed into compulsory liquidation and the Official Receiver was appointed as liquidator, with Michael John Andrew Jervis, David James Kelly, David Christian Chubb, Peter Dickens, David Matthew Hammond and Russell Downs of PwC being appointed as special managers … Continue Reading

Happy new year – or economic meltdown?

At the turn of the new year, economists provide their financial predictions akin to the great Nostradamus. They predict a bleak outlook for the UK economy in 2018, but such forecasts are not always accurate. The continuing uncertainty of the Brexit negotiations is likely greatly to affect the prospects of any improvement in the UK … Continue Reading

A Fight over the Runway II – Monarch Successful on Appeal

Following on from our previous blog A Fight Over the Runway – Monarch Administrators Lose High Court Battle, the latest development in the saga is the recent Court of Appeal decision in Monarch Airlines Ltd v Airport Coordination Ltd [2017] EWCA Civ 1892. Overturning the decision of the High Court, the Court of Appeal held that Monarch … Continue Reading

A Fight Over the Runway – Monarch Administrators Lose High Court Battle

An out-of-hours office appointment of an administrator, although not unusual, is not a regular occurrence in the world of insolvency. It is however, exactly what happened at 4am on Monday 2 October, as Britain’s longest surviving airline brand ‘Monarch’ entered administration. The collapse of the airline comes as a result of mounting cost pressures in … Continue Reading

Bankruptcy Proceedings in Russia: An Analysis of Insolvency Statistics

Sergey Treschev and Elena Malevich of Squire Patton Boggs’ Moscow office have joined with legal journalists Alina Mikhailova and Maria Fomicheva of Pravo.ru to write an article recently published in Insolvency and Restructuring International. They analyze Russian insolvency statistics from 2014 to 2017, drawing out some interesting trends. The process of publishing and exchanging information about … Continue Reading

Declaration of debts by French debtors- creditor vigilance is still required!

Three years ago, the Commercial Code amended the procedure for declaring debts in France with the aim of simplifying the management of insolvency proceedings. Before this reform, the only way for creditors (excluding employees) to declare their debts was to send their proof of debt to the receiver within 2 months (or 4 months for those living outside … Continue Reading

Spanish Court declares unlimited liability mortgage clause void

Spain’s Civil Code provides that when the sale proceeds of a mortgaged property do not cover all the debt contracted with the bank, the debt continues to subsist and the bank may go against any other asset belonging to the customer, with the exception of properties that are untouchable, for the shortfall. However, a Court in Barcelona has … Continue Reading

Rules of Engagement for Creditors – New Insolvency Rules In Force 6 April 2017

On 6 April 2017, the new Insolvency Rules come into force which will affect creditors’ rights in most insolvency procedures. The changes are designed to ensure insolvency processes are as efficient and streamlined as possible in order to maximise returns to creditors by reducing costs whilst retaining safeguards to avoid abuse or injustice. Whether you are … Continue Reading

We’re all going on a summer holiday – but make sure it’s ATOL protected

The decorations are down, the last of the Quality Street has been consumed and the New Year’s resolutions are a distant (and perhaps failed) memory…….suddenly the dreary weather leads to thoughts of sunshine and distant shores. Travel companies have dubbed the first Saturday in January ‘Sunshine Saturday’ as many holidaymakers plot their escape during the … Continue Reading

New Year; New Personal Insolvency Regime for Slovakia

The Slovak personal insolvency regime will change on March 1, 2017. The new system is aimed at opening personal insolvency to a wider debtor audience, while keeping it simple and cost effective. Today, only those individuals with assets over EUR 1,659.70 could seek a declaration of bankruptcy. Otherwise, the proceedings would be stopped and the doors … Continue Reading

Prohibited names and partnerships under Section 216

The recent case of Re Newtons Coaches [2016] EWHC 3068 considered whether a partnership falls within the remit of s.216 Insolvency Act 1986 (“IA 86”). The case looked at what s.216 is designed to prevent and the nature of partnerships in the context of both the Insolvent Partnerships Order 1994 (“IPO 94”) and the IA … Continue Reading
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