Tag Archives: litigation

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

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

English Scheme of Arrangement approved for Luxembourg-registered company

The English High Court has sanctioned a scheme of arrangement for Algeco Scotsman PIK SA, a Luxembourg-incorporated company, after the creditors consented to the New York governing law and jurisdiction clause being altered in favour of the jurisdiction of the English courts. The issues discussed were: the fair representation of a class of creditors; cross-jurisdictional schemes; and early tender fees offered … Continue Reading

Australian investors gain significant win against Standard & Poor’s

Investors in Australia, represented by Squire Patton Boggs in Sydney, have made history again with another big win over Standard & Poor’s (S&P). They were granted leave to pursue a “tort of deceit” claim, alleging that S&P intentionally altered its ratings methodology to achieve higher ratings in order to serve its business objectives. This is the … 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

The enforcement of pre-existing security over assets that become subject to a freezing order

A recent decision in the High Court provided guidance with respect to the apparent conflict between freezing orders that have been granted over assets that are subject to an existing security. Generally speaking, a freezing order should only catch the unsecured elements of assets. The question facing the court in Taylor v Van Dutch Marine … 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

The High Court in London goes digital

As of 25 April 2017, for courts within the Chancery division of the High Court in London, the filing of all applications, forms and documents must be performed electronically. This includes the Bankruptcy and Companies Courts within Greater London. It does not apply to the High Courts outside London. Where once a lawyer might expect … Continue Reading

Insolvencies in Germany – New Avoidance Law in Force

On 5 April 2017, an amendment to the German Insolvency Code (Insolvenzordnung – “InsO”) has come into force which provides for various changes to the avoidance rules and clawback laws in German insolvency proceedings. The major change affects the right of an insolvency administrator to challenge transactions for willful disadvantage (§ 133 InsO).… 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

We’ve heard it all before: re-running arguments in bankruptcy proceedings

The Court of Appeal in Harvey v Dunbar Assets plc [2017] EWCA Civ 60 has confirmed that parties cannot re-litigate failed arguments that have previously been presented in bankruptcy proceedings. This will be welcome news for creditors in situations where debtors rehearse the same arguments at several stages of the bankruptcy process in an attempt … Continue Reading

Beware French Employees’ Remedy for Damage to their “Individual Interests”

It is not always easy to prioritize between the various goals pursued in every insolvency legislation, namely; the continuation of the company, preservation of the jobs, the general economic/public interest and the payment of dividends to creditors. There is no clear hierarchy in French law amongst these major targets and French case law appears fairly pragmatic. … Continue Reading

Chancellor of English High Court looks to a post-Brexit future

In an address last week to the Insolvency Lawyers Association, Sir Geoffrey Vos, the new Chancellor of the High Court, looked at the future for Insolvency and Business Litigation in London, especially after Brexit. Whilst acknowledging that Brexit presents a challenge, he said it is one which should not defeat the English Courts. The main issue … Continue Reading

Cross Border Insolvency Regulations 2006- Lifting the automatic stay on proceedings in the English courts

The English Court has agreed to lift the automatic stay on proceedings under the Cross Border Insolvency Regulations 2006 (“CBIR”) against STX Offshore & Shipbuilding Co Ltd (“STX”) which had entered into rehabilitation proceedings in Korea. Facts STX had guaranteed to Ronelp Marine Limited and others (“Claimants”) the performance of a subsidiary (Dallan) in relation to … Continue Reading

Creditors v Private Pension Holders – has UK bankruptcy law gone too soft?

The recent Court of Appeal decision in Horton v Henry has highlighted the protection afforded to a bankrupt holding a private pension to the detriment of his bankruptcy creditors. Facts The bankrupt, Mr Henry, was the holder of  a number of pension policies all of which contained provisions entitling him to make elections which would trigger rights to … Continue Reading

Reviewing the Ratings

Multiple class actions have been commenced in the Australian Federal Court  in relation to losses suffered by investors in synthetic collateralised debt obligations and other financial products, some of which were distributed or sold by Lehman Brothers Australia Ltd (in liquidation) and by certain major Australian banks, and were assigned credit ratings by Standard and Poor’s. … Continue Reading

Why financiers should consider taking security over short leases

When we review security for financiers, we always consider what enhancements they might implement to strengthen their security net. As part of this approach, we obtain a proprietor search from the Land Registry to see if there is any uncharged property in the name of the borrower. Often, any property identified is a short to … Continue Reading
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