Insolvency Blog - UK Insolvency
Informal winding-up made more difficult - Part 3
Date: 18th October, 2012 | Author: Steve Smith | Comments: 0
As previously reported, the Government introduced legislation into the Corporation Tax Acts covering the practice previously contained in Extra-Statutory Concession C16 (ESC C16) which took effect on 1 March 2012. In broad terms, under the new legislation, provided certain conditions are satisfied, where total distributions do not exceed £25,000 such distributions will be treated as a capital receipt in the hands of the shareholder. However, initially it was not clear whether the share capital was to be included in the “total amount of the distributions”. HMRC have now confirmed that it should not and the threshold is to...
Government’s missed opportunity to reduce red tape
Date: 3rd September, 2012 | Author: Chris Laughton | Comments: 0
The Telegraph reports “Insolvency Service reform scrapped - the Government has scrapped plans to reform the process that leads to rogue directors being struck off.” Apparently in order to “reduce red tape for the smallest companies”, the Department for Business, Innovation and Skills has shelved an initiative to streamline the process of insolvency practitioners (many of whom are micro businesses) reporting directors’ misconduct. How red tape can be reduced by not streamlining a burdensome regulatory process is beyond me! ...
Mercer & Hole’s strategy approved at creditors’ meeting for fitness shoe brand
Date: 17th July, 2012 | Author: Maria Bailey | Comments: 0
Creditors collectively approved Mercer & Hole’s strategy for the administration of Masai GB Limited at yesterday’s creditors meeting. Chris Laughton and Peter Godfrey-Evans of Mercer & Hole had been appointed in May 2012 as joint administrators of the UK distributor for the high-street shoe brand MBT with stores and concessions throughout the UK. The administrators had the company continue to trade for as long as stocks were available and costs could be controlled tightly. The result was 2 months of profitable trading, during which some of the 53-strong workforce could continue to be employed. The prospects for...
Insolvency law in the frontline
Date: 12th July, 2012 | Author: Chris Laughton | Comments: 0
This week’s peer panel in The Lawyer highlights some of the current issues facing the insolvency profession. A key theme is the disappointing lack of UK legislative development. The administration expenses regime is crying out for statutory intervention to restore administration as the tool of the rescue culture that it was designed to be. UK insolvency professionals are adept at using constructively the tools they have, as evidenced by the increasingly productive use of CVAs and schemes of arrangement, but we could do so much more if the legislature was prepared to engage constructively and...
Administration of Masai GB Limited and UK distributor of MBT (Masai Barefoot Technology) footwear
Date: 17th May, 2012 | Author: Maria Bailey | Comments: 0
At 12 noon today, Chris Laughton and Peter Godfrey-Evans of Mercer & Hole were appointed as joint administrators of Masai GB Limited. The £8 million turnover company is the UK distributor of MBT (Masai Barefoot Technology) footwear and has 10 stores and a number of concessions throughout the UK. Following the filing for bankruptcy in Switzerland of the group’s parent company (Masai Marketing & Trading AG) on Monday 7 May 2012, Masai GB Ltd went into administration on Thursday 17 May 2012. Chris Laughton and Peter Godfrey-Evans will be working with the company’s management and staff to sell the business and...
TUPE damages employees’ and the UK’s interests
Date: 13th April, 2012 | Author: Chris Laughton | Comments: 0
The Transfer of Undertakings (Protection of Employees) legislation is so restrictive that business value (and hence employees' interests as creditors), businesses' ability to continue (ie jobs) and opportunities to undertake international restructurings in the UK using administration are all suffering. I am writing from an AIJA (International Association of Young Lawyers) conference in Prague, where I have been speaking and am representing INSOL Europe. Discussions over the last 24 hours both on and off the platform have highlighted to me that the UK's implementation of the EC Acquired Rights Directive is so flawed as to not only render the UK...
Has the rescue culture lost its way?
Date: 11th February, 2012 | Author: Chris Laughton | Comments: 0
Responding to the question raised in my last post, New law, insolvency regulation and the rescue culture, a former colleague, Paul Brindley, believes that the rescue culture has lost its way: Chris In my view the rescue culture has lost its way. There are three reasons for this: 1) The law regarding financial support directions was drafted purposely to enable creditors, not the government and not the pension fund industry generally, to meet final salary shortfalls. For the last twenty odd years every government has seen final salary schemes as an additional taxable opportunity; 2) Legislation often has unintended...
New law, insolvency regulation and the rescue culture
Date: 31st January, 2012 | Author: Chris Laughton | Comments: 0
The UK insolvency regime began preparing for the 21st century with the Cork Report in 1982. That led directly to the Insolvency Act 1986, introducing the rescue mechanisms of administration and voluntary arrangements. Major refinements followed with the Enterprise Act 2002, enhancing the new mechanisms and facilitating the constructive use of insolvency procedures. Since then, however, it has not been entirely plain sailing: administration is widely seen as terminal: "going bust" is a common media description although the procedure is designed as a temporary opportunity for restoration; the effectiveness of administration has been seriously blunted by various rent, pension and other...
Pre-packs endorsed by the Government
Date: 27th January, 2012 | Author: Chris Laughton | Comments: 0
After examining the use of pre-packs as an insolvency tool, the government has abandoned the idea of legislating to give notice to creditors in all pre-packs and concluded that: "Pre-pack sales can offer a flexible and speedy means of business rescue and when used appropriately can be the best way of maximising returns for creditors." The challenge that the Minister has laid down to insolvency regulators is to ensure that pre-packs are used "appropriately". This is the right result, but insolvency practitioners should respond by using pre-packs well and, most importantly, explaining clearly and promptly why each pre-pack produces the...
Bankruptcy and winding-up petition reform
Date: 19th January, 2012 | Author: Chris Laughton | Comments: 0
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....
