Insolvency Blog

• Interest free loan to meet redundancy payments

  Few employers are aware of the financial assistance offered by the Insolvency Service's Redundancy Payments Office ('RPO') to meet the cost of redundancies. [...]
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  Posted: December 01, 2009, 6:37am EST
  

• New Insolvency Rules

  Modernisation and consolidation are the focus of The Insolvency (Amendment) (No. 3) Rules 2009, which are published in draft form by the Insolvency Service and are due to come into force on 6 April 2010. Fortunately they are accompanied by... [...]
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  Posted: November 05, 2009, 3:35pm EST
  

• HMRC fast track Time oo Pay Scheme

  The HMRC Business Payment Support Service is responsible for running the Time to Pay Scheme to assist businesses with temporary cash flow difficulties. [...]
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  Posted: November 03, 2009, 5:18am EST
  

• HMRC fast track time to pay scheme

  The HMRC Business Payment Support Service is responsible for running the Time to Pay Scheme to assist businesses with temporary cash flow difficulties. [...]
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  Posted: November 03, 2009, 5:18am EST
  

• Directors' personal liability for tax breaches

  In the recent case of E D Games Limited the liquidators brought such a claim against the director. It resulted from his failure to submit VAT returns or pay VAT or any tax for a period of 22 months before the company went into liquidation. [...]
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  Posted: October 29, 2009, 9:39am EDT
  

• INSOL Europe - Deputy President

  Chris Laughton, a restructuring and insolvency partner at Mercer & Hole in London, has succeeded to the deputy presidency of INSOL Europe, the European organisation of professionals who specialise in insolvency, bankruptcy and business reconstruction & recovery. Speaking from Stockholm... [...]
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  Posted: October 03, 2009, 12:54pm EDT
  

• Employment Rights Act - increase in maximum amount of a week's pay from 1 October 2009

  From 1 October 2009, the maximum amount of a week's pay for the purposes of calculating payments under the insolvency (and other) provisions of the Employment Rights Act 1996 is increased from £350 to £380. [...]
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  Posted: October 01, 2009, 5:30am EDT
  

• 35 year long liquidation of Apal is finally completed

  The 35 year long liquidation of Apal is finally completed, a tour operator that went bust in 1974 after the collapse of the Israel-British Bank. [...]
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  Posted: September 28, 2009, 6:00am EDT
  

• Statutory demands

  A statutory demand is a formal written request from a creditor for the payment of an unsecured debt due to it within a period of 21 days from the date of service of the demand. [...]
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  Posted: September 17, 2009, 5:28am EDT
  

• What you should know about insolvency - Part 1

  As the UK economy begins, in late 2009, to recover from the harshest recession in 75 years, insolvency is becoming somewhat more prevalent than has been the long term experience of most of us. The few high profile administrations such... [...]
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  Posted: September 15, 2009, 11:43am EDT
  

• Real cross-border insolvency problems

  Answers to blog readers' enquiries about real life situations may be helpful to others with similar difficulties - here are some on cross-border issues. Q: I am a German GP and currently working in UK. I have a bankruptcy order...' [...]
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  Posted: September 13, 2009, 3:18pm EDT
  

• Director disqualification proceedings on the increase

  There has been a marked rise in the number of Director Disqualification Proceedings being issued by the Insolvency Service. In the year to 31 March 2009 the total number of companies targeted was 1079 by comparison to 820 in the previous year, an increase of some 31%. [...]
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  Posted: September 11, 2009, 4:59am EDT
  

• HMRC and corporate insolvency

  HMRC tax [...]
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  Posted: September 06, 2009, 4:42am EDT
  

• Sir Allen Stanford - US receiver defeated on COMI

  The controversy surrounding Sir Allen Stanford has reached the Royal Courts of Justice. Both the Antiguan liquidator of Stanford International Bank Limited and the US receiver appointed over its assets sought recognition in the UK under The Cross Border Insolvency Regulations 2006. [...]
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  Posted: July 08, 2009, 5:18am EDT
  

• Senior Insolvency Administrator - London

  Mercer & Hole's Restructuring & Insolvency practice is growing. Particular need for an Insolvency Senior Administrator in our London office' [...]
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  Posted: June 05, 2009, 11:06am EDT
  

• CVA Construction and Interpretation - EH3

  Whether the terms of a CVA are fair and sensible has a bearing on their meaning, according to the Court of Appeal in Re Energy Holdings (No 3) Ltd (in liquidation) [2009] EWCA Civ 173 CA. The EH3 proposals included... [...]
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  Posted: May 18, 2009, 5:13am EDT
  

• Invalid administration appointment - the s245 conundrum

  When is an administrator not an administrator? The facts: An administrator appointed by a qualifying floating charge holder discovers that the purportedly qualifying floating charge is "invalid" under s245 Insolvency Act 1986, in that the consideration for the charge was... [...]
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  Posted: April 11, 2009, 5:39pm EDT
  

• Surviving the recession

  Cash Control is Key Make sure you are aware of all aspects of your current financial position. Sticking your head in the sand and hoping it will all fix itself is never going to be constructive. Budget, forecast and... [...]
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  Posted: March 25, 2009, 8:38am EDT
  

• Landlords beware - post administration rent is an unsecured claim

  A landlord has no automatic right to be paid rent as an administration expense and, as regards rent falling due after the date of the administration order, the landlord is an unsecured creditor of the tenant company. In case there... [...]
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  Posted: February 09, 2009, 4:02am EST
  

• Bankruptcy petition an abuse of process

  You may remember an earlier post Liquidation and bankruptcy petition dangers, where I highlighted a legal decision emphasising that a petition is not to be used to pressurise a debtor into paying one creditor. Ruth has asked about how to... [...]
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  Posted: February 05, 2009, 9:59am EST
  

• Pre-packs are good for creditors

  Pre-pack administrations, where the business of an insolvent company is sold as soon as the administrators are appointed, often to the company's management or shareholders, are under scrutiny. The Business and Enterprise Select Committee (Chairman - Peter Luff MP) examined...' [...]
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  Posted: January 31, 2009, 4:02am EST
  

• How to invest in the recession

  While the recession will undoubtedly hurt a good many people, those (albeit relatively few) private investors and buyers of businesses who have ready cash to invest stand to make handsome profits as they take advantage of increased opportunities to buy... [...]
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  Posted: January 23, 2009, 9:43am EST
  

• Cross-border insolvency - HIH Insurance

  You may recall that we blogged on HIH Insurance (McGrath v Riddell) back in April 2008. The significance of the judgement is not the result that English assets were remitted to Australia, but the absence of majority support for... [...]
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  Posted: January 22, 2009, 12:45pm EST
  

• Survive the credit crunch

  For most businesses, the next year or so will be a time of battening down the hatches as they see their profits squeezed, their cash flows under increasing pressure, and the banks not as 'profligate' as they were before. [...]
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  Posted: December 09, 2008, 4:38am EST
  

• Pre-Budget Report 2008 - Insolvency Issues

  A new special insolvency procedure for investment firms that hold client assets or client money is to be introduced in response to issues arising in the administration of the UK subsidiary of Lehman Brothers. A review of the insolvency arrangements... [...]
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  Posted: November 24, 2008, 5:50pm EST
  

• Restructuring your way out of recession

  Credit is hard to find and, with global recession looming, businesses face many new challenges. The solution is to develop sensible, cost effective and tax efficient restructuring plans. Cash flow and business viability are key and should be uppermost in... [...]
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  Posted: October 17, 2008, 10:29am EDT
  

• What will happen to my employees if my company goes bust?

  It depends on: how early you react to deal with the problem; whether any part of the business is able to continue as a going concern; and what workforce is required for that business (remembering that a purchaser may have... [...]
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  Posted: September 15, 2008, 3:25pm EDT
  

• Buying a business out of insolvency - employee liabilities and TUPE

  Q: I want to buy a business that’s about to go bust. Do I have to pay the claims of its employees? A: It depends on: what you buy (assets alone or a business); the type of insolvency procedure (was... [...]
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  Posted: September 11, 2008, 2:11pm EDT
  

• Statute barred debts and reposession

  Repossession and the Limitation Act 1980 provoked several comments on our earlier post Repossession statute barred! Legal readers especially are invited to click on the link and share their views.... [...]
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  Posted: September 08, 2008, 5:58pm EDT
  

• Netherlands insolvency increase

  The credit crunch is hitting mainland Europe, raising insolvency rates, according to Legal Week's recent article NautaDutilh launches 20-strong Benelux team. Most UK insolvency practitioners felt the economy starting to bite in midsummer and all the signs here are that,...' [...]
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  Posted: September 04, 2008, 5:09pm EDT
  

• Credit crunch hits UK businesses

  The number of companies facing insolvent liquidation rose by 15% during the second quarter of 2008, as compared to the same period last year, as the credit crunch continues to impact upon the UK economy. Figures from The Insolvency Service... [...]
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  Posted: August 01, 2008, 6:02pm EDT
  

• Individual insolvencies unexpectedly fall

  The number of individuals becoming insolvent fell 8.3% to 24,553 in the second quarter, surprising analysts who expected to see an increase as evidence that higher living costs were impacting upon people's finances. Individual insolvencies were made up of 15,297...' [...]
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  Posted: August 01, 2008, 11:19am EDT
  

• E-mail re-direction in bankruptcy

  In some jurisdictions not only may a bankrupt's mail be redirected to his trustee or insolvency administrator but so may his e-mails (eg Article 99 German Insolvency Code). I'm not aware of this happening in England & Wales because s371... [...]
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  Posted: July 11, 2008, 8:49am EDT
  

• Business and the credit crunch - time for critical self-appraisal?

  The credit crunch has made it more important than ever for business owners to address viability and solvency issues early. Delays in taking remedial steps now will only result in more pain and fewer options, and will give you less... [...]
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  Posted: July 07, 2008, 6:05am EDT
  

• Find a Business Angel

  We all know how to find a good service provider - personal recommendation. But what if you want help now and don't know who to ask? One piece of good advice is to be wary of paying someone up front...' [...]
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  Posted: June 30, 2008, 6:26am EDT
  

• Bankruptcy annulment

  The High Court insists on payment of the bankruptcy debts and expenses being made in full before granting an annulment order, whereas in the county courts orders are often granted based upon undertakings to pay. In the case of Halabi... [...]
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  Posted: June 16, 2008, 8:30am EDT
  

• Protective awards provable in liquidations: Day v Haine appeal

  Under our previous post Permacell Finance: judgements affecting charge holders, commentators debated the then recent High Court case of Day v Haine, in which Sir Donald Rattee held that a protective award (for the employer's failure to consult on redundancies...' [...]
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  Posted: June 12, 2008, 2:00pm EDT
  

• Transactions at an undervalue and defrauding creditors

  The time limits within which transactions at an undervalue can be upset under sections 238 and 339 of the Insolvency Act 1986 are reasonably well understood: 2 years for companies and 5 years for individuals. Section 423, which deals with... [...]
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  Posted: June 09, 2008, 1:15pm EDT
  

• Legal and beneficial ownership and constructive trusts

  The Court of Appeal case Oates v Stimson [2006] EWCA Civ 548 highlights the need for advisers when ascertaining parties' interests to consider not only the legal and beneficial ownership of a property but also the potential for a constructive... [...]
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  Posted: June 02, 2008, 1:21pm EDT
  

• Group and Company Reorganisations - s110 arrangements

  At some time during the development of a company the directors and shareholders are likely to see advantages in diversifying the ownership of business activities. There are many reasons why a reorganisation of a company's activities is desirable. More often... [...]
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  Posted: May 21, 2008, 5:39pm EDT
  

• HIH Insurance (McGrath v Riddell) - Lords divided on universalism

  A unanimous appeal verdict but a divergence of reasoning characterise the Law Lords' speeches in McGrath and another v Riddell and others [2008] UKHL 21. The significant point of the judgement is not the result of English assets being remitted... [...]
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  Posted: April 12, 2008, 12:44pm EDT
  

• Bank insolvency

  As the major (English) trading creditor of the London branch of a troubled bank registered and with its principal operations and headquarters in Switzerland but with other branches in a variety of largely offshore jurisdictions, what insolvency process would you... [...]
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  Posted: April 09, 2008, 5:46pm EDT
  

• Business failures leap as credit crunch hits companies

  Experian reports a rise in UK corporate insolvency: up 8.5% in Q1 2008 compared to Q1 2007, in line with our last forecast here. Business sectors identified as suffering include agriculture, banking, food retail and clothing (although some of the... [...]
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  Posted: April 08, 2008, 6:43pm EDT
  

• An Insolvency Practitioner's perspective on the economy

  Some say we are on the brink of a major slow down. Clearly the economy is not as strong as it has been, but surely the real questions are: just how sharp is the ‘adjustment’ likely to be; how long... [...]
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  Posted: March 10, 2008, 12:12pm EDT
  

• Reposession statute barred!

  An interesting case passed through the Court of Appeal a few weeks ago, which counsel for the bank concerned said could impact on a good number of cases where banks have acquiesced in allowing borrowers to remain in their homes.... [...]
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  Posted: February 29, 2008, 4:22am EST
  

• EHYA insolvency law reform proposals - Part 1

  The European High Yield Association has announced refinements to its proposals to the Treasury on insolvency law reform. Its original submission in April 2007 identified perceived shortcomings of the Enterprise Act reforms: ". . . the administration procedure has not... [...]
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  Posted: February 26, 2008, 4:58pm EST
  

• Directors' responsibilities in troubled companies

  Directors' duties Directors' duties can be onerous at the best of times. The general duties have been codified in the Companies Act 2006 and are summarised simply in the following Ministerial statement: Act in the company’s best interests taking everything... [...]
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  Posted: February 26, 2008, 6:39am EST
  

• English business insolvency trend

  We reported just over a year ago (here) on Euler Hermes' 2006-2007 Insolvency Outlook, which suggested a 3% increase in business insolvencies in 2007. Their latest report, issued in November 2007, forecasts under the headline "United Kingdom - A rise... [...]
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  Posted: February 18, 2008, 1:12pm EST
  

• Retail problems and construction insolvency

  Shopfitter JDS Group Limited was not saved by a critical mass of 350 staff and £30m turnover as it went into administration on 12 February, suggesting that retail problems (see our previous post - Retail insolvencies as the credit crunch... [...]
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  Posted: February 18, 2008, 6:23am EST
  

• Northern Rock nationalised

  The Chancellor has announced (notably without using the n-word) that Northern Rock is to be nationalised. What does this mean? The shares pass into public ownership The government has at last called the bluff of the hedge fund shareholders Ron... [...]
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  Posted: February 17, 2008, 5:20pm EST