Priority liabilities meaning

This checklist outlines recommended actions and practical steps that a local authority (LA) could take to avoid the undue build-up of social care debt by service users. Prevention Preventing the accumulation of debt is the crucial priority. Below are proposed measures for the client department of an LA to adopt so liabilities do not progress to formal legal action, or to make early recovery activity simpler: Gather thorough details at the outset of the process. Obtain as much financial evidence as possible, including copies of bank statements, DWP correspondence, and so on...

In this issue: Competition and state aid Data protection and cybersecurity Free movement, employment and immigration Financial services Energy Environment IP Life sciences TMT International trade Daily and weekly news alerts New and updated content Trackers and horizon scanners Competition and state aid Antitrust—General Court awards damages for Commission’s failure to pay interest following annulment of Airfreight cartel decision The General Court delivered its rulings in Cases T-310/21 Air Canada v Commission and T-313/21 SAS Cargo Group and Others v Commission, seeking damages and, in the alternative, annulment, arising from the Commission’s refusal to pay interest after the General Court set aside its 2010 Airfreight cartel decision in 2015 by that court. Accordingly, the General Court partially upheld the claims for compensation. See News Analysis: EU Competition law—daily round-up (25/03/2026)...

Banking & Finance—December 2023 and January 2024 case round-up The Joint Administrators of Lehman Brothers Holdings plc (In Administration) v LB GP No 1 Ltd (In Liquidation) and others [2023] EWHC 3056 (Ch) Intercreditor—ranking of statutory interest on subordinated debt The High Court examined whether statutory interest owed to a subordinated creditor should be met before principal due to another subordinated creditor sitting lower in the payment waterfall. This required construing the contractual priority provisions and how they interact with IR 14.23, which regulates the payment of interest. The court held that statutory interest due to the higher-ranking subordinated creditor must be paid ahead of principal payable to the lower-ranking subordinated creditor. The judge noted that, when provable debts are in competition, priority turns on the parties’ contractual arrangements, in particular the subordination terms governing the junior claim. IR 14.23(7) does not override such arrangements and falls to be read subject to the contractual subordination. The wording “liabilities in respect of the Notes” was interpreted broadly...

Liquidation Following enforcement of security by fixed charge creditors for their own benefit, the order of distributions in a winding up is: if liquidation commences within 12 weeks of a moratorium, any unpaid moratorium debts and ‘priority pre‑moratorium debts’ to which no payment holiday applied during the moratorium expenses properly incurred in the winding up (including the liquidator’s remuneration) ordinary preferential debts secondary preferential debts the prescribed part for unsecured creditors (where not disapplied) debts secured by floating charges unsecured debts statutory interest postponed debts (i.e. non‑provable liabilities) return of any surplus to members (subject to adjustment between members) For further details, see Practice Note: Waterfall of payments in liquidation...

A company voluntary arrangement (CVA) proposal, or any alteration to it, cannot be approved by the company or its creditors if it would interfere with a secured creditor’s ability to enforce its security, unless that secured creditor agrees. In practice, where significant secured creditors or major landlords are involved, it would be atypical to advance a CVA without prior dialogue with them before circulating the proposals (see Practice Note: CVAs—landlord issues and remedies). In addition, where a CVA is put forward within 12 weeks of a moratorium ending under the Corporate Insolvency and Governance Act 2020 (CIGA 2020), those owed unpaid moratorium debts and priority pre-moratorium debts effectively hold a veto: neither the company nor the creditors may sanction the CVA unless those liabilities are discharged in full, unless the relevant creditors consent. CIGA 2020, Sch 3, para 4 protects creditors with unpaid moratorium debts and priority pre-moratorium debts (as defined in new section 174A of the Insolvency Act 1986 (IA 1986)) in any subsequent CVA (see Practice Note: Moratorium)....

This Practice Note outlines: the principal corporation tax consequences when a UK‑incorporated company enters administration in the UK; and certain other tax considerations that may arise during the course of the administration Administration is a highly adaptable procedure and has become a popular means of addressing, and in many instances rescuing, insolvent businesses. It provides breathing space to enable a rescue or a restructure, or to achieve a better outcome for all creditors than would be possible on liquidation. Administration is an entirely statutory process. When reforms were introduced by the Enterprise Act 2002 (EnA 2002), inserting Schedule B1 into the Insolvency Act 1986 (IA 1986) for administration, HMRC also brought in specific tax rules to cover certain matters, although these are not comprehensive. For fuller discussion of the administration process, see: Administration—overview and, below: What is an administration and what is its purpose? From a tax perspective, the implications of administration can be far‑reaching, and without careful consideration there...

Contribution agreement—private M&A—asset purchase This DEED is executed on [ insert day and month ] 20[ insert year ] Parties The persons whose names and addresses appear in the Schedule (together, the Sellers, and each a Seller). BACKGROUND The Sellers have entered into, or expect shortly to enter into, the Asset Purchase Agreement with the Buyer in relation to the disposal of the Business and the Assets (each as defined in the Asset Purchase Agreement). The Sellers have agreed to govern how Claims will be handled under the Asset Purchase Agreement and to apportion their respective liabilities arising from any Claim, in accordance with this Deed...

Date [ date ] Parties [ name of Buyer ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] (Buyer) [ name of Seller ] [ of OR incorporated in England and Wales (company registration number [ number ]) whose registered office is at ] [ address ] (Seller) 1 Definitions For this Deed, the terms set out below shall have the meanings assigned to them: [ Affordable Housing • [ social rent, affordable rent and intermediate subsidised homes provided to persons who are unable to rent or buy dwellings generally available on the open market OR carries the meaning attributed to that expression in Annex 2 of the National Planning Policy Framework presently current ] ; ] Competent Authority • any: (a) local council, highway authority, government department or any other authority, body or individual exercising powers under statute or by...

Contribution agreement—private M&A—share purchase This Deed is executed on [ insert day and month ] 20[ insert year ]. Parties The individuals whose names and addresses appear in the Schedule (together, the Sellers, and each separately, a Seller). Background (A) The Sellers have entered into, or expect shortly to enter into, the Share Purchase Agreement with the Buyer concerning their disposal of [ the whole of the issued share capital of OR [ insert number ] [ ordinary OR [ insert class ] ] shares in ] the Company. [ The parties have also entered into, or will shortly enter into, the Tax Covenant. ] (B) The Sellers have agreed to prescribe the process by which any Claims are addressed under the Share Purchase Agreement [ and the Tax Covenant ] and to apportion their respective liabilities arising from any Claim in accordance with the terms of this Deed...