Insolvency Blog -

The government consultation Reform of the Process to Apply for Bankruptcy and Compulsory Winding Up, which proposes adjudication by Insolvency Service staff rather than a court hearing of most petitions for bankruptcy and companies winding-up, has begun to trigger debate. The High Court's Chief Bankruptcy Registrar and the Insolvency Service's Director of Policy have recently exchanged views through Accountancy Age. I confess to favouring the view of the learned judge. As I write, the consultation has 12 days left to run, closing on 31 January 2012. The government (through the Insolvency Service's Policy Unit) welcomes the views of all interested parties....

Click here to continue reading.

The failure of directors to notify the company, in accordance with Paragraph 26, Schedule B1, Insolvency Act 1986, of their intention to appoint administrators does not necessarily render the administrators' appointment invalid. In two carefully considered judgments in cases heard on consecutive days in November 2011, the most recent of which was handed down on 21 December: Virtualpurple; and Bezier: Mr Justice Norris explains how he has been able to clarify the previously unsatisfactory state of the law. We noted in May the surprising and unhelpful Minmar decision. Like me (but he expresses it far more eloquently in Virtualpurple), Norris J prefers...

Click here to continue reading.

In a statement on insolvency practitioner regulation today (20.12.11) The Minister for Employment Relations, Consumers and Postal Affairs [and Insolvency] recognised strong stakeholder support for an independent single regulator. Announcing the government's response to the consultation on insolvency practitioner regulation, which closed in May 2011, he said he could see the merits of a single independent regulator. I thought 6 months ago that a single independent regulator was an unattainable ideal and I am delighted that the idea has gained traction. Many IPs support the concept individually and R3, the trade association, is now said to be looking forward to...

Click here to continue reading.

In his quest for economic stimulus in the Autumn Statement, George Osborne failed to drive banks and borrowers to put the assets and resources of moribund businesses to good use. For many months now observers have commented on the zombie companies that clog up our economy. Adam Posen of the Bank of England’s Monetary Policy Committee draws a parallel with Japan in the 1990s being stalled by unproductive borrowers on whose loans the banks could not afford to take losses. Although Posen’s observations were seeking to promote central bank monetary stimulus in continental Europe, the...

Click here to continue reading.

Restructuring & Insolvency is an integral part of Mercer & Hole’s business. A very busy period when our core skills of constructive use of insolvency procedures, stressed corporate advisory work and solvent restructuring have been in high demand, has prompted us to grow our Restructuring & Insolvency teams. We are now looking to employ a senior administrator, to be based in our St Albans office.  The successful candidate is likely to have at least 4-5 years of insolvency administration experience and be able to administer a portfolio of cases. The role mainly involves corporate...

Click here to continue reading.

Preference law, rules on reorganisation or composition plans, claim validation rules and insolvency of groups of companies are included amongst the topics identified as apt for harmonisation in INSOL Europe's report to the European Parliament, Harmonisation of Insolvency Law at EU Level. They are also the topics discussed in a paper by Roelf Jakob De Weijs in an Amsterdam Law School research paper, Harmonisation of European Insolvency Law and the Need to Tackle Two Common Problems: Common Pool & Anticommons. Arguing for a European debate on bankruptcy theory, De Weijs explains creditors frustrating reorganisation or composition plans, creditors...

Click here to continue reading.

Financial Support Directions and Contribution Notices issued by The Pensions Regulator after a target company has gone into administration give rise to liabilities that rank as administration expenses under Rule 2.67(1)(f) Insolvency Rules 1986. So found the Court of Appeal as it dismissed the appeals in the Nortel and Lehman cases. In a serious blow to the rescue culture, the court found that it could not under the relevant statutes classify such liabilities as provable debts and, since classifying them as debts payable only once other creditors had been paid in full (the "black hole" result) cannot have been the intention...

Click here to continue reading.

A liquidator’s investigation into a family company resulted in the liquidator pursuing the directors (and other family members as de facto directors) for repayment of overdrawn loan accounts as well as compensation for misfeasance and breach of fiduciary duty. The liquidator’s claim was based upon the incomplete books and records he had been able to obtain whilst the directors/family members relied upon oral evidence. The court considered the importance of written evidence not only for assessing credibility and supporting oral evidence, but also where it might be conspicuous by its absence and the inferences drawn. ...

Click here to continue reading.

Luca Cordero di Montezemolo, Chairman of Ferrari, today graphically described the strengths of Italian industry in terms of its people and their passion. Likening a Ferrari to a beautiful woman, he also said that German cars are great - like a freezer - good, efficient engineering! In a keynote address celebrating INSOL Europe's 30th anniversary, he noted that Ferrari had undergone a variety of restructurings in the 60 years since it first won the British Grand Prix at Silverstone, as it did again in 2011. Clearly proud of his company's European Workplace of the Year award in 2007, he...

Click here to continue reading.

Mercer & Hole's Chris Laughton is in Venice hosting this morning's INSOL Europe's Annual Congress 2011. Here's what Chris is expecting over the next couple of days. "My final job as President of INSOL Europe is to host this year's conference in Venice. The last few days of preparations have been busy, but have brought home just how much has gone on. I can't pre-empt conference announcements, but to touch on some highlights: the European Insolvency Case Register is launching; a number of serious academic initiatives are to be announced; detailed and learned submissions on proposed changes to the European...

Click here to continue reading.