A bit of a bumper edition newsletter, to follow on from our Employment Law Special.
Relevant beyond restructuring plans, is the decision of the court in Argo Blockchain, where the court confirmed that you can’t have a meeting of one person. The decision brings into question the role of proxy holders who will often act on behalf of several creditors, but if there is only one proxy holder this decision confirms that they can’t have a meeting with themselves. Our blog touches on how the court dealt with this in the context of a restructuring plan where a class of creditors voting in favour of the plan were treated as dissenting creditors because the voting requirements were not met.
The way that most of us communicate nowadays – by email, WhatsApp and instant messaging – can and does have legal consequence. Therefore, it is good practice to pause before pressing send. This blog looks at a personal insolvency case that considered the implications of WhatsApp messages when considering whether property had transferred, and gives food for thought to practitioners more generally about the implications of modern communication.
Although s234 IA86 allows an office holder to recover property, where there are occupiers/trespassers of real estate property owned by a company an officeholder cannot obtain possession of that utilising s234. This recent decision confirms the approach taken previously by the Court of Appeal that such a claim must be pursued under the civil procedure rules.
When can you disregard the consent of preferential creditors to extend an administration? In an unreported case, the court considered whether an administrator required the consent of preferential creditors where they had previously given a para 52(1)(b) statement and thought there would be a distribution to preferential creditors. When it later transpired that there would not be a distribution, the administrators extended the administration without getting consent from preferential creditors – the court decided that their consent was not required. Read more on this case in this blog.
How much is too much? Following the appeal of ICCJ Burton’s previous decision, the High Court was asked to consider the liquidators’ request to disclose company records on a “forever basis”. Although there is no bar to officeholders requesting all documents to reconstitute all of the company’s records the court confirmed that such a request must be reasonable. A “give me everything you have” request is not going to cut it without justification. An officeholder must be able to say why they reasonably need the documents. Our blog considers the appeal in more detail.
Who is liable for rates of an unoccupied property where the tenant company enters a Company Voluntary Arrangement (CVA), and then “exits” the property as part of the CVA? In short, for the company in a CVA – there is no exemption. The company is the entity that remains in occupation for the purposes of rating liability. Our blog explores the court’s decision on this point. However, that does not mean that nothing can be done about that: looking back to 2019, Paperchase was one of the largest (and potential first) companies to compromise rates liabilities as part of its CVA.
In brief, the government
Has updated its guidance for insolvency practitioners on sanctions.
Intends to legislate to reverse the effect of the PACCAR decision (see our blog on this), but also intends to introduce legislation that will regulate the practice of litigation funding. This will impact litigation funding/funders, which is of course relevant to IPs. As to whether this will have a positive or negative effect (we anticipate the former), we will have to wait for the detail.
Finally, our new insolvency litigation quick guide collection has been bolstered with the addition of our guide Key Considerations for Insolvency Practitioners Ahead of Litigation – see our previous quick guide Overview of Insolvency Claims and look out for the next edition soon.
If you would like specific advice on any of these issues or anything else, please contact a member of our UK Restructuring & Insolvency team.
