Tag Archives: insolvency practitioner

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

Zombie High Street: Retail Casualties

There was a magical place that’s now in administration. It’s called ‘Toys R Us’, Toys R Us’, Toys R Us’. This week has seen another two major retail casualties with the aforementioned much-loved toy shop and well-known electrical retailer Maplin going into administration within minutes of each other. As predicted in one of our recent … 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

Hellas – a blow to the confidentiality of litigation funding arrangements

A great deal of insolvency litigation is funded by non-parties to a claim – for example, by a creditor or an “after the event” (ATE)  insurer. Ordinarily such arrangements and their precise terms are confidential and are not required to be fully disclosed to a counterparty in litigation. In the recent case of Re Hellas Telecommunications (Luxembourg) [2017] EWHC 3465 … Continue Reading

Contracts via email – potential pitfalls

A recent decision of the High Court (Goel and another v Grant and another [2017] EWHC 2688 (Ch)) has provided a useful reminder that care must be taken when administrators enter into pre-contract negotiations and the risk of inadvertently entering into a binding contract before terms are finalised. It also deals with the risks of disposing … Continue Reading

The woes of Toys R Us – will the “magical place” have its Christmas dreams come true?

“There’s a magical place, we’re on our way there, with toys in their millions, all under one roof – it’s called… Toys R Us!” The lyrics resonate with millions worldwide. The advert is as iconic as Coca Cola’s “Holidays Are Coming” commercial or the Sainsbury’s “Christmas is for sharing” World War 1 cinematic ad. Sadly, … Continue Reading

EU Proposals for Harmonisation of Insolvency Practitioners and Judges

Much has already been written about the proposal for the “Second Chance” directive (“Proposal“) published in November 2016 which is still being debated by the EU bodies – and rightly so. Harmonisation of insolvency law across the EU is needed as one in four insolvency proceedings is a cross-border insolvency and creditors need to know what to … Continue Reading

Taking flight: taxation on receivership

The recent case of Farnborough Airport Properties Company and another v HMRC is noteworthy for the light it shines on the dimly lit and often difficult interaction between tax law and insolvency. The issues The two companies operating Farnborough Airport (the host of ‘the largest industry event on the aerospace calendar’) were members of the … Continue Reading

Reporting the misconduct of companies, directors and bankrupts

There are various ways misconduct can be reported in respect of companies and individuals. Establishing which authority has the power to conduct investigations of wrongdoing depends to a certain extent on the status of the companies and individuals. The Insolvency Service is empowered by law as the proper authority to investigate transgressions such as serious corporate abuse and the conduct of … Continue Reading

Shining a light on the GDPR – is the insolvency profession prepared?

What is the GDPR? The General Data Protection Regulation (GDPR) is an EU regulation designed to strengthen and harmonise data protection rules for processing data of all individuals within the EU and covers the transfer of such personal data outside the EU. One of the aims of the new legislation is to give control back to individuals … Continue Reading

Employee Benefit Trusts and insolvency – the next big thing?

Remuneration schemes involving Employee Benefit Trusts (EBTs) have become more prevalent over the last 20 years, often as a way of seeking to remunerate key employees without making pay as you earn or national insurance contributions. Given the developments highlighted below, insolvency practitioners are advised to investigate such schemes in matters coming across their desks to see … Continue Reading

“But, we had a deal!” – Office Holders and Personal Liability for Costs

The recent Court of Appeal case of Stevensdrake Limited v Stephen Hunt [2017] EWCA Civ 1173 provides guidance on whether the office holder is liable to meet the legal costs in CFA cases where there are insufficient recoveries in the estate to meet those costs. Central to costs assessments in litigation proceedings is what is … Continue Reading

EU Insolvency Regulation is recast at last

Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings comes into effect on 26 June 2017 for insolvency proceedings that are opened on or after that date. The Recast Regulation replaces the EC Regulation (1346/2000) on insolvency proceedings and has direct effect in the UK until … Continue Reading

Cross-Border Co-operation in Group Insolvency Proceedings- Myth or Reality?

As 26 June 2017 approaches – the date of entry into effect of the Recast EU Insolvency Regulation (2015/8484/EU) – we  look in detail at the new provisions for co-ordinating the insolvency proceedings of members of a pan-European group of companies and consider whether the new proposals for co-operation will be compulsory, the practicalities of who will … Continue Reading

EACTP debates draft Business Insolvency Directive in Brussels

The European Association of Certified Turnaround Professionals (EACTP) organized an evening of debate about the proposed new European Directive on business insolvency held in Brussels on May 2nd at the offices of Squire Patton Boggs. Salla Saastamoinen, the European Commission Director of the Civil and Commercial Justice Unit, attended the event called A New European … Continue Reading

Does ATE insurance trump Security for Costs?

When reviewing a security for costs application under CPR 25.12, the courts are faced with the challenge of striking a balance between an impecunious claimant’s access to justice and the possibility of a successful defendant being unable to recover their costs. This is because the general rule in relation to costs under CPR 44.2 is … Continue Reading

Take “Special” care: Not all Insolvency Rules change on 6 April

The wait is almost over! As reported in our recent blog Rules of Engagement for Creditors, the Insolvency Rules (England and Wales) 2016 (“IR2016”) are about to arrive heralding procedural reforms effective (subject to transitional provisions) on 6th April 2017. Whilst most people’s attention will be on the changes introduced by IR2016, it should be … 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 … Continue Reading

Wrongful Trading – The Importance of Quantifying Loss

The recent successful appeal in Brooks and another (Joint Liquidators of Robin Hood Centre plc in liquidation) v Armstrong and another [2016] EWHC 2893 (Ch), [2016] All ER (D) 117 (Nov) has clarified and highlighted the complexities of bringing a wrongful trading claim and the importance of correctly quantifying losses for which directors can be made … Continue Reading

The return of Turpin! – Validity of Administration Appointments by Directors and the Duomatic Principle

In the case of Re BW Estates Ltd the High Court considered the validity of a directors’ out of court appointment in circumstances where there was technically an inquorate directors’ board meeting. It was held that the appointment was not invalid despite only one director being present at the meeting convened to put the company into administration in … Continue Reading