Insolvency Blog - UK Insolvency

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...

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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...

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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...

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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...

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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. ...

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Insolvency Lawyers' Association's Response to the draft Insolvency (Amendment) (No.2) Rules 2011 I thoroughly endorse the Insolvency Lawyers' Association's response to the Government's proposed amendments to the law on pre-pack insolvencies, which is accessible at  http://www.ilauk.com/news/insolvency_and_restructuring_news/ and is reproduced below. 1. Introduction 1.1 This is the ILA's summary response to the draft Insolvency (Amendment) (No.2) rules 2011 (the "Draft Rules") published by the Insolvency Service on 16 June 2011. It has been prepared on behalf of the ILA by its Technical Committee (the "Committee"). 1.2 The ILA provides a forum for c.450 full,...

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With continuing demand for its quality gravure printed products, the insolvency of the UK branch of a European network gives rise to an investment opportunity. With orders still to fulfil, cessation of trade was due to a lack of funds to buy consumables – not due the lack of orders. Our TV channels are full of DIY programmes and people across the UK and Europe are getting more and more adventurous about making their house a home. Combined with the decline in new house sales, the renovation and redecorating market is burgeoning. How extraordinary then that a successful UK wallpaper,...

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HMRC’s latest comment concerning ‘Time to Pay’ (TTP) arrangements has stated that TTP will not be available where companies are paying out dividends to their shareholders. It is HMRC’s opinion that the cash should be used to pay tax before paying dividends the company can not afford! This will clearly hit hardest those companies where directors have chosen to receive remuneration on a dividend basis rather than by way of salary. The adoption of HMRC’s stance means that two businesses in a similar financial position will receive different levels of support simply...

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 The Insolvency Service is still "in listening mode" in relation to its February 2011 Consultation on Reforms to the Regulation of Insolvency Practitioners, according to a presentation on 15 June by its Director of Policy, even though the consultation is officially closed. That better regulation is required is beyond doubt, but how to achieve it proportionately and cost-effectively, in a way that gives confidence to users of insolvency services and all those affected by insolvency, including the insolvency profession, is the challenge. Recognising that a single independent regulator is an unattainable ideal, my principal suggestions - and this is a personal...

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Directors appointing administrators under paragraph 22(2), Schedule B1, Insolvency Act 1986 must give notice of intention to appoint to the company (pursuant to paragraph 26(2), Schedule B1, Insolvency Act 1986 and Rule 2.20(2)(d), Insolvency Rules 1986). The "record of the decision of the directors" to make the appointment required by Rule 2.22 must be of a valid board resolution in compliance with the requirements of the company's articles at a meeting properly convened with notice. So found Sir Andrew Morritt (Chancellor) in Minmar (929) Ltd & Teejinder Paul Chohan v Freddy Khalatschi & Martin John [2011] EWHC 1159(Ch), holding the appointment of administrators in that...

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