UK: First Review of the Insolvency (England and Wales) Rules 2016 - call for evidence

The Insolvency Service has published a call for evidence in respect of its first review of the Insolvency (England and Wales) Rules 2016: see here. These Rules, to quote from the opening paragraph of the call for evidence, "... set out the detailed procedure for the conduct of company and individual insolvency proceedings under the Insolvency Act 1986, providing the framework giving effect to the regime specified in the Act. They represent the single most significant piece of legislation in respect of the insolvency regime operating in England and Wales, after the Insolvency Act itself; and the largest, with over nine hundred rules in the main body and numerous additional schedules covering specific topics".

UK: The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020

The Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) (No. 2) Regulations 2020 were laid before Parliament yesterday and came into force today: see here or here (pdf). As the accompanying explanatory memorandum explains (here, pdf), these Regulations have been made for somewhat embarrassing reasons: to revoke and supersede a first set of Regulations - the Charitable Incorporated Organisations (Insolvency and Dissolution) (Amendment) Regulations (S.I. 2020/710) - which, due to an "administrative error", were made in a form containing drafting errors and omissions. The purpose of the new Regulations remains, nevertheless, the same: to ensure the effective application to CIOs of the new moratorium provisions within Part A1 of the Insolvency Act 1986 (as inserted by the Corporate Insolvency and Governance Act 2020). 

UK: England and Wales: winding-up companies on public interest grounds

The Court of Appeal gave judgment several days ago in Secretary of State for Business, Energy And Industrial Strategy v PAG Asset Preservation Ltd [2020] EWCA Civ 1017. A summary of this important decision, which concerned section 124A of the Insolvency Act 1986, has now been published by the ICLR: see [2020] WLR(D) 451.

Section 124A provides that where it appears to the Secretary of State that it would be expedient in the public interest that a company should be wound-up, the court may permit a winding-up petition to be presented where it concludes that it would be just and equitable to do so.  At first instance the trial judge declined, on the Secretary of State's application, to wind-up two companies that operated what was described as a business rates avoidance (or mitigation) scheme: see Secretary of State for Business, Energy and Industrial Strategy v PAG Asset Preservation Ltd [2019] EWHC 2890 (Ch)). The Court of Appeal affirmed that decision and noted (at para. [61]): 

.... when determining whether it is just and equitable to wind up a company under section 124A, the court is required to identify for itself the aspects of the public interest which would be promoted by making a winding up order. In this case, however, there is no challenge to the judge's finding that there was no evidence of harm to the public and in oral submissions before us, Mr Chaisty was unable to identify any class of the public who were or might be harmed. An essential element, therefore, is missing".

 

UK: Insolvency Service call for evidence on the regulation of insolvency practitioners

The Insolvency Service has published a call for evidence concerning the regulatory framework for insolvency practitioners, in particular the introduction of regulatory objectives and other changes made by Part 10 of the Small Business, Enterprise and Employment Act 2015: see here (pdf).

Australia: corporate insolvency law reforms

The Treasury has published an exposure draft of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017: see here (pdf). The purpose of the Bill is to make some significant changes to the corporate insolvency regime, including: (a) the introduction of a safe harbour regime for company directors from personal liability for insolvent trading in the context of a restructuring; and (b) making unenforceable, where a company is being restructured, 'ipso facto' clauses in contracts which permit one party to terminate or modify the contract due to an insolvency event.

Further information is available in the draft explanatory memorandum accompanying the Bill: see here (pdf).

UK: a review of the corporate insolvency framework

A joint consultation paper - from the Insolvency Service and Department for Business, Innovation and Skills - was published today and seeks views on reforms to the corporate insolvency framework: see here (pdf). Four main proposals are outlined, including the introduction of a new moratorium as well as reforms designed to make it easier for companies to continue trading during restructuring. Further information, including a response form and impact assessment, is available here.

Jersey: pooling the assets of companies in liquidation

Last month the Royal Court (Samedi division) confirmed that it had the power to order the pooling of the assets of two companies in liquidation (one in Jersey and the other Guernsey): see Representation of Huelin Renouf Shipping [2015] JRC 206. In the same month, and in the connected proceedings, the Royal Court (Ordinary division) in Guernsey held that it had same the power: see here.

UK: The Insolvency (Amendment) Rules 2015

The Insolvency (Amendment) Rules 2015 were laid before Parliament earlier this week: see here or here (pdf). The Rules make various amendments to the Insolvency Rules 1986 and will introduce new disclosure obligations for insolvency practitioners in certain insolvency procedures, including providing an estimate of fees (remuneration) and anticipated expenses. Further information about the Rules is available in the accompanying explanatory memorandum: see here (pdf). An impact assessment has been prepared: see here (pdf).

UK: The Insolvency Practitioners (Amendment) Regulations 2015

The Insolvency Practitioners (Amendment) Regulations 2015 were laid before Parliament today and come into force on 1 October 2015: see here or here (pdf).  One of the changes being introduced by the Regulations concerns the records that insolvency practitioners are required to maintain. A new record keeping obligation will be introduced and this will require insolvency practitioners to keep records sufficient to show and explain the administration of each case and any decisions taken which materially affect that case.  Further information is available in the explanatory memorandum accompanying the Regulations: see here (pdf).

Guernsey: insolvency law reform - consultation underway

A consultation is currently underway in respect of Guernsey's insolvency law regime. Opinions are sought on reform proposals concerning personal and corporate insolvency, in a discussion paper published by the Commerce and Employment Department: see here (pdf). The paper provides a useful overview of Guernsey's current insolvency law regime.

Amongst the questions asked in the consultation paper are the following. Should there be a single insolvency law statute? Is it necessary to create the office of 'official receiver' in Guernsey? Should there be a registration and licensing regime for insolvency practitioners? Should there be a widening of circumstances in which antecedent transactions are capable of challenge?  Should a register for fixed and floating charges be introduced?

Isle of Man: a call to update insolvency law

The High Court gave judgment several days ago in Munin Navigation v Petrodel: see here. The court held that it had the discretion to grant retrospection sanction for a liquidator to employ lawyers; in doing so the trial judge (His Honour Deemster Gough) called for the updating of insolvency law on the Isle of Man (at para 63):

"I proffer a general comment on the archaic statutory provisions and rules which govern insolvency in the Isle of Man. These provisions are out of date, confusing and much in need of revision to accommodate the type of business the Island presently conducts and hopes to attract as it moves forward in the 21st century. It has been said before, and bears repeating, that all those who have to deal with insolvency and winding up of companies in the Isle of Man, not least the Courts, would benefit greatly from an up-to-date revision of the law in these areas, such that the Island can better cater for modern commercial practice."

UK: Consultation on insolvency practitioner regulation and fee structure

A consultation paper was published yesterday setting out proposed reforms to the regulatory framework governing insolvency practitioners: see here. It is proposed, amongst other things, to introduce regulatory objectives for those organisations (the recognised professional bodies) authorising insolvency practitioners.

UK: Financial Support Directions and insolvency - Supreme Court judgment in Nortel and Lehman Companies

The Supreme Court gave judgment earlier today in In the matter of the Nortel Companies; In the matter of the Lehman Companies; In the matter of the Lehman Companies (No.2) [2013] UKSC52. A copy of the judgment is available here (pdf). A summary is available here (pdf). The court unanimously held that liability under a financial support direction, issued by the Pensions Regulator after a company had gone into administration, was not an expense of the administration but ranked as a provable debt. At first instance and on appeal it was held that the liability was an expense of the administration (see, respectively, [2010] EWHC 3010 (Ch) and [2011] EWCA Civ 1124). A video recording of Lord Neuberger delivering the court's opinion is available below:

Europe: the future of European insolvency law - Commission proposals published

Earlier this year the European Commission consulted on the future of European insolvency law. The Commission's proposals were published yesterday: see here. A new Regulation is proposed to make cross-border insolvency proceedings more efficient and to facilitate corporate rescue.

UK: consultation on reform of the bankruptcy and compulsory winding-up application process

The Insolvency Service has published a consultation paper titled Reform of the Process to Apply for Bankruptcy and Compulsory Winding Up: see here (pdf). The principal proposal is that where there is no dispute between the parties, the court should be removed from the process by which bankruptcy and winding-up orders are granted.

UK: the anti-deprivation rule in insolvency law

The Supreme Court gave judgment yesterday in Belmont Park Investments PTY Ltd v BNY Corporate Trustee Services Ltd. [2011] UKSC 38. This is an important decision concerning the scope of the anti-deprivation rule in insolvency law, a summary of which is available here (pdf).

Update (29 July 2011): the ICLR has provided a summary of the case here.

UK: England and Wales: no administration order in respect of club that was not a company

The High Court gave judgment last week in Panter v Rowellian Football Social Club [2011] EWHC 1301 (Ch) - see here - and held that a club was not a company within the definition provided by para. 111(1A), Schedule B1 of the Insolvency Act (1986). The court did not, therefore, have jurisdiction to make an administration order, for which one of the club's creditors had made an application.

UK: Scotland: liquidator's remuneration and the court's discretion

Lord Glennie delivered his opinion yesterday in Spicer and Cork, Noters, for remuneration [2011] CSOH 87 - see here - and considered the discretion of the court when determining the remuneration of liquidators. With reference to authorities in England, New Zealand and Australia, Lord Glennie held that where remuneration is not fixed by a liquidation committee the court has a general discretion to fix the remuneration payable to a liquidator and, when setting the level of that remuneration, to reflect a sanction for any breach by the liquidator of his duties.

UK: consultation published - reforms to the regulation of insolvency practitioners

The Insolvency Service has published a consultation paper on reforms to the regulation of insolvency practitioners: see here (pdf).

UK: England and Wales: financial support directions - an expense of administration/liquidation

The ICLR, as part of its WLR Daily service, has published a summary for Bloom v The Pensions Regulator (Nortel, Re) [2010] EWHC 3010 (Ch): see here. The summary's headnote reads: "Liabilities arising from the financial support direction (“FSD”) regime created by the Pensions Act 2004 upon companies in administration or liquidation were payable as a liquidation or administration expense". For further background information see here.