Craig Falconer
Craig is an Associate in the Finance and Projects Division of Addleshaw Goddard LLP. With a commercial real estate background, Craig focusses on all aspects of distressed real estate, acting for lenders, insolvency practitioners and corporates in connection with the acquisition, management and sale of distressed property and has been involved in a number of large portfolio sales. Craig also regularly advises lenders, investors and corporates on all aspects of real estate finance projects.
Practice Area
Panel
- Scottish Panel
Qualified Year
- 2008
Education
- Aberdeen University ' LLB
- Robert Gordon University - LLM
7 Contributions by Craig Falconer
PRACTICE NOTES
Gratuitous Alienation and Transactions at an Undervalue in Scotland: Risks, Defences and Remedies in Pre-insolvency Property Deals
Background
One of the core tenets of an effective insolvency regime is that an insolvency practitioner (described in this Practice Note as an ‘IP’) may examine the conduct of the insolvent party (described in this Practice Note as the ‘Debtor’) in the period preceding insolvency, to determine whether earlier transactions have improperly disadvantaged the valid claims of creditors by reason of antecedent dealings. For instance, a Debtor facing financial distress might have disposed of particular assets at undervalue to generate quick cash in the short term. Yet, by doing so (and effectively placing those assets beyond creditors’ reach) the Debtor may have weakened creditors’ prospects of recovery and nullified any security they held over those assets (for example, a floating charge), rendering it redundant. Although an IP will, for the most part, be focussed on a snapshot of the Debtor’s assets and liabilities at the time of appointment with a view to distributing to creditors, the entitlement to review and potentially recover assets transferred pre-appointment can, in parallel, be a possible source of income for the insolvent estate. Under the Bankruptcy (Scotland) Act 2016 (Ba(S)A 2016) and the Insolvency Act 1986 (IA 1986), IPs...
Property
PRACTICE NOTES
Operation of Scottish commercial leases in tenant and landlord insolvency: irritancy, landlord’s hypothec, administration, liquidation, receivership, sequestration, CVAs, moratoria, rent as expenses, assignation/renunciation
What effect does insolvency have on the operation of a lease?
This Practice Note explores how insolvency influences the day-to-day operation of a lease and addresses the principal concerns that commonly emerge when an insolvency practitioner (IP) becomes involved in the landlord and tenant relationship for commercial premises...
Types of insolvency process
The relevant insolvency procedure is determined by the tenant’s location (for a corporate entity, its registered office), rather than the situs of the leased property. For the purposes of this Practice Note, it is assumed that the landlord and tenant are both based in Scotland and that Scots law governs the lease. The main formal insolvency procedures in Scotland are summarised below...
Corporate Administration
Administration offers a framework designed to enable the rescue of an insolvent company. An administrator is appointed and, while the company remains in existence, it acts through that administrator. Appointment can be made by an administrative order or, on an out of court basis, by the holder of a qualifying floating charge, the directors, or the company (ie the shareholders). For further information about the procedure, see Practice Note:...
Property
CHECKLISTS
Conveyancing or leasing from a company in administration (Scotland): due diligence on appointment, floating charges, warrandice and registration
Administrator appointed by the court
Where the court appoints an administrator under paragraph 11, Schedule B1 to the Insolvency Act 1986 (IA 1986), following an application by the company, its directors and/or any one or more of its creditors, the title deeds must contain certified copies of:
the administration order; and
any subsequent order(s) under IA 1986, Sch B1, paras 91–95 appointing a new administrator on the death, resignation or removal of the original or any successor
The Administrator must also register a notice of appointment at:
Companies House; and
the Register of Inhibitions, using a form that complies with the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 (ISCVAAR 2018), SI 2018/1082, r 3.27
Administrator appointed by holder(s) of qualifying charge, the company or its directors
Where appointment is made by the holder(s) of a qualifying floating charge (under IA 1986, Sch B1, para 14) or by the company or its directors (under IA 1986, Sch B1, para 22), the title deeds should include certified copies of:
the notice of appointment:
in a form complying with the requirements of:...
Property
CHECKLISTS
Due diligence checklist for taking a lease or disposition from a receiver or administrative receiver (Scotland): floating charges, appointment, execution, warrandice, securities discharges and registration
When taking a lease or a disposition from a receiver or an administrative receiver, the title deeds should include:
the original or a certified duplicate of the floating charge under which the receiver was appointed
a certificate from the chargee (or their solicitor) confirming the appointment power under the floating charge has crystallised
the original or a certified duplicate of the instrument appointing the receiver, whether under IA 1986, s 53 (by the holder of a floating charge) or IA 1986, s 54 (by the court), and
for any appointment under IA 1986, s 53, a certified copy of the receiver’s notice accepting the appointment (the original is retained by the chargee)
It is also necessary to check that the floating charge:
is registered at Companies House
has been properly executed (see Practice Note: Execution of documents under Scots law)
includes authority permitting the receiver’s appointment and the transaction (ie lease or disposition)
Checking the appointment
An administrative receiver cannot be appointed under a floating charge created after 15 September 2003, save where the charge falls...
Property
CHECKLISTS
Leasing or buying from a liquidator (Scotland): property due diligence checklist on liquidation type, title and appointment evidence, joint liquidators, warrandice, directors' authority and registration
Compulsory liquidation
Provide a certified court interlocutor ordering winding up and naming the liquidator, plus certified proof of appointment: creditors’ resolution, contributories’ resolution with the liquidator’s certificate on the creditors’ meeting, or a court order.
Creditors’ voluntary liquidation
Include a certified general meeting winding‑up resolution and either the creditors’ resolution appointing the liquidator or a court order.
If moving straight from administration, add a certified, administrator‑signed and Companies House‑stamped form 2.25B (Scotland).
Members' voluntary liquidation
Supply a liquidator/secretary certificate that a solvency declaration was filed, and a certified general meeting resolution appointing the liquidator.
Checking the appointment
Irregularities do not invalidate acts, but absence of appointment does—so verify appointment and any limits on Schedule 4 powers; in compulsory cases powers are court‑controlled and creditors or contributories may apply.
Joint liquidators
Confirm power to act severally; otherwise all must execute sale documents.
Warrandice and limitation of liability
Expect warrandice excluded or limited to fact and deed, no title guarantee or warranty for moveables, and an agency/no personal liability clause.
Registering the lease or disposition
File the above appointment evidence; have resolutions certified by the secretary or solicitor. Directors’ powers end on winding up (or on appointment in a voluntary case) unless duly sanctioned; obtain proof...
Property
CHECKLISTS
Leasing or Buying from Trustees under Scottish Trust Deeds for Creditors or Interim or Permanent Trustees in Bankruptcy—Checklist
Trustee in trust deed for creditors
Authority to sell or lease must be expressly stated within the trust deed for creditors. If absent, recourse is to statutory powers under:
section 4 of the Trusts (Scotland) Act 1921
section 2 of the Trusts (Scotland) Act 1961
Interim trustee in bankruptcy
An interim trustee in bankruptcy lacks authority to contract, sell, or lease unless the court has specifically granted that power...
Property
CHECKLISTS
Property due diligence checklist: buying or leasing from a heritable creditor in possession (Scotland)
When taking a lease or buying from a heritable creditor in possession, the title deeds should include:
the original instrument or a certified copy of the standard security by which the heritable creditor asserts title
proof that the right to enforce the standard security has crystallised (namely, that a default has occurred and calling-up procedures have been observed), see Practice Note: Enforcing standard security—Scotland
The standard security will be recorded against the property title; however, you should also confirm that it:
has been filed at Companies House
has been validly executed, see Practice Note: Execution of documents under Scots law and Registers of Scotland—guidance on execution of documents in counterpart
includes provisions enabling the heritable creditor to call up and sell or lease
In most instances, standard securities contain an express power to enforce upon the occurrence of...
Property
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