Restructuring Roundup (UK)

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Here is our summary of key developments relevant to restructuring professionals that you might have missed, with links for further information.

In our last update we shared our briefing note highlighting changes proposed by the Employment Rights Bill that are likely to affect insolvency practitioners. This briefing note has been updated to reflect changes made to the bill as it moves through the parliamentary process.
For practitioners who act as MVL liquidators, this recent decision (and its potential appeal) should be noted. The court determined that the 12-month rule means that all debts and interest must be paid, and, if they are not, the MVL must be converted to CVL. This goes against general practice and leaves the question – which is not answered in the judgment – what if the 12-month period has already expired on an existing matter? Keep an eye out for any appeal and guidance from your RPB. In the meantime, we have updated our MVL alert to reflect this decision.
On the MVL theme, HMRC have also published Updates to the Members Voluntary Liquidation Process – Insolvency Practitioner Bulletin 10, which gives guidance on the process that HMRC expects IPs to follow when finalising tax liabilities. Although recently published, this does follow an update published last year, so IPs may already be familiar with this.
At the same time, HMRC have also published Confidentiality and Disclosure in Personal Insolvencies – Insolvency Practitioner Bulletin 12, and Insolvency Practitioner Appointments Mailbox – Insolvency Practitioner Bulletin 14 – note from this bulletin that HMRC will cease reviewing requests for nomination.
Who is a secured creditor? A question that has caused concern in the market since the cases of Pindar and Toogood last year where the court determined that paid secured creditors did not need to consent to an administration extension. These decisions, although seemingly helpful created more questions than perhaps they answered. However, the Insolvency Service, in this edition of Dear IP, have given practitioners more flexibility to make their own decisions about who a creditor is. See also our more detailed alert.
The Building Safety Act retrospectively extended limitation from 6 to 30 years for certain claims arising under the Defective Premises Act 1972, which has caused and continues to cause problems when considering how to restructure a construction business. In a recent Supreme Court decision, the court considered the scope of who pays the remediation costs – explored in more detail in Building Safety F(Act)s prepared by our construction team.
S234 of the Insolvency Act 1986 gives an office-holder power to “get in” the company’s property. In a recent Court of Appeal decision, the court considered the scope of the meaning of “property”, and, although much turned on the facts, the decision provided a few key takeaways for officeholders seeking to rely on S234, which are outlined in our blog.
Restructuring plans (particularly the challenge to the Thames Water plan, and, more recently, the Court of Appeal decision in Petrofac, where the plan was set aside) remain topical as the courts grapple with more complex plans. The picture is becoming clearer about how to deal with out-of-the-money creditors, a point discussed in our recent blog on Petrofac.
Did you see that the Insolvency Service has issued an update on its review of the personal insolvency framework? Read on if this is of interest to you. The update outlines the Insolvency Service’s initial evaluation and conclusions.
We are delighted to announce that Ranajoy Basu has joined the firm as our new global head of structured finance. His arrival underscores our commitment to delivering strategic, commercially focused advice in today’s evolving restructuring landscape.