Legal News

Practice Note: Creditors’ decision-making in bankruptcy For a summary of creditor communications and decision processes, refer to Creditor communication and decision procedures—overview......

Restructuring & Insolvency weekly highlights—8 May 2025 In this issue: Key R& I law developments Insolvency litigation Restructuring Corporate insolvency processes Directors and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New content New Q& As Key R& I law developments Insolvency Practitioners ( Recognised Professional Bodies) ( Revocation of Recognition of the Institute of Chartered Accountants in Ireland) Order 2025 SI 2025/549: This instrument withdraws recognition of the Institute of CAI as an RPB entrusted with authorising and supervising insolvency practitioners. It takes effect on 1 June 2025. See: LNB News 07/05/2025 27. Insolvency litigation Supreme Court confirms that section 213 of the Insolvency Act 1986 is not restricted to those involved in the management or control of the company’s business ( Bilta ( UK) Ltd (in liquidation) v Tradition Financial Services Ltd; Nathanael Eurl Ltd (in liquidation) v Tradition Financial Services Ltd). The Supreme Court unanimously refused both appeals....

Re Sino- Ocean Group Holding Ltd [2025] EWHC 205 ( Ch) What are the practical implications of this case? The practical implications of this judgment are: Questions about how a voting class is constituted or composed should, preferably, be aired at the convening hearing, not deferred to the sanction hearing. A dissenting creditor cannot simply contend that liquidation or any other ‘relevant alternative’ advanced by the plan company is not the relevant alternative for Condition A; they must also identify a specific alternative. It is not abusive for a plan company to include a consenting class within a plan, even if this enables a cross‑class cram down, provided the plan has a meaningful effect on that assenting class. When assessing any challenge to whether a special interest creditor’s vote is representative, the court will proceed flexibly rather than apply a rigid “but for”...

Public examination of officers under section 133 of the Insolvency Act 1986 Refer to the Practice Note covering the public examination of officers pursuant to section 133 of the Insolvency Act 1986. For concise outlines on evidence and the processes for gathering it, consult the following overviews: Evidence and evidence gathering—overview Evidence gathering and obtaining property—overview ......

In this issue: Key R& I law developments Restructuring Personal insolvency Directors and insolvency Insolvency litigation Financial institutions Daily and weekly news alerts Key dates for restructuring and insolvency professionals Key R& I law developments R3 announces appointment of new president to lead insolvency and restructuring body The Association of Business Recovery Professionals ( R3) has named Tom Russell, a licensed insolvency practitioner and director at James Cowper Kreston, as its next president. His tenure begins as the government prepares reviews of insolvency regulation and the personal insolvency framework. His priorities include growing membership, harnessing technology, strengthening stakeholder engagement, showcasing the profession’s value, and supporting career progression, all against mounting economic headwinds for UK businesses and consumers. See: LNB News 29/04/2025 30. FCA updates guidance for insolvency practitioners on approach to insolvencies of regulated firms The FCA has...

Thomas and another (as trustees in bankruptcy of Roderic Alexander Innes Hamilton) v Jones and another [2025] EWHC 756 ( Ch) What are the practical implications of this case? In most claims under IA 1986, s 423, the chief difficulty for a claimant is proving that the person who entered into the transaction intended to put assets beyond a creditor’s reach; that subjective purpose must be established. In the great majority of matters there is no direct ‘smoking gun’; instead, the claimant relies on the court drawing proper inferences against the defendant from other objective or established facts. In this dispute, the clear judgment of Insolvency and Companies Court Judge Prentis proceeds by assembling a series of discrete findings of fact which, though not conclusive individually, together create a picture from which the court could infer that Mr Jones had the requisite...

South Square South Square Digest In this edition, Georgina Peters, alongside a Freshfields team, explores how an English court might be expected to assess a US-style liability management exercise that (1) depends on a majority within a class consenting so as to bind the remaining minority of that class and (2) affords dissenting creditors treatment less favourable than that afforded to those who agree. Richard Fisher KC, topically drawing on Thames Water, examines Sufficient interest, mischief making and setting aside sanction: when should a third party be allowed to seek to involve itself in a sanctioned restructuring plan and reverse the final sanction order? while Dr Riz Mokal delivers a thorough, well-argued review of the UK’s position in Cram dos, don’ts and darn its: The ‘too much unfair value’ approach to the UK cramdown. Click here to access the April 2025 edition of the South...

Re Outsideclinic Ltd [2025] EWHC 875 ( Ch) What are the practical implications of this case? This decision holds practical relevance for the mid-market. It illustrates that companies still striving to emerge from the COVID-19 pandemic, and unable to satisfy a familiar cohort of creditors—such as HMRC, a secured creditor, suppliers asserting proprietary rights in their stock, unsecured creditors and landlords—can, with rigorous financial scrutiny and analysis, demonstrate to their creditors and to the court that a restructuring plan may attract not only HMRC’s support (together with the majority of the other compromised creditors and the court), but HMRC’s vote in favour of the plan. The case is striking because HMRC used the sanction hearing to signal to companies in England and Wales a willingness, where appropriate, to back Restructuring Plans. It is of procedural interest to restructuring...

In this issue: Key R& I law developments Restructuring Personal insolvency Directors and insolvency Insolvency litigation Industry/sector guides for R& I lawyers No Weekly Highlights on 24 April 2025 Daily and weekly news alerts Key dates for restructuring and insolvency professionals New Q& As Key R& I law developments Insolvency Service publishes March 2025 enforcement outcomes management information The Insolvency Service has refreshed its enforcement outcomes management information for March 2025. The figures record 95 director disqualifications and eight bankruptcy and debt relief restrictions. See: LNB News 14/04/2025. Restructuring Judgment Alert: Kington S.À. R. L. v Thames Water Utilities Holdings Ltd [2025] EWCA Civ 475 An appeal was brought against the decision of Mr Justice Leech to sanction a restructuring plan under Part 26A of the Companies Act 2006 ( CA 2006) concerning Thames Water Utilities Holdings...

Seculink Ltd v Forbes [2025] EWHC 524 ( Ch) What are the practical implications of this case? This judgment bolsters the position of secured creditors looking to enforce a debtor’s liability for the principal on a secured borrowing that has been called in, confirming that the principal itself falls outside an MHCM. As that principal is not a ‘qualifying debt’ under the Regulations, interest continues to accrue during the MHCM and remains recoverable by the creditor. The court also confirmed it has jurisdiction to decide whether a liability owed by a debtor subject to an MHCM is a ‘moratorium debt’ and therefore benefits from the MHCM. This gives creditors the ability to challenge, in court, the inclusion of their debts within an MHCM rather than being limited to the review procedure provided by the...

Rukhadze and others v Recovery Partners GP Ltd and another [2025] UKSC 10 Background This appeal concerns the fiduciary ‘profit rule’. Fiduciaries, including trustees and company directors, owe a duty of loyalty to their beneficiary or principal (the person for whom they hold or administer property, eg the company in the case of a director). That duty includes a requirement that, where a fiduciary derives a profit by virtue of their position, they must account for that gain to the principal, unless the principal has given fully informed consent. The respondents to this appeal are a company incorporated in the British Virgin Islands (to which the claims of another such company have been assigned) together with an English LLP. The individual appellants were engaged by the respondents and occupied roles of trust and responsibility (for example serving as directors), thereby owing fiduciary duties to them. In...

The Official Receiver (as liquidator of WIFIME Ltd (in liquidation)) and another company v Haq and another [2025] EWHC 485 ( Ch) What are the practical implications of this case? This decision clearly demonstrates, in practical terms, the effect of the evidential burden shifting in fiduciary disputes (including claims against company directors). Once a claimant liquidator shows that company monies have been withdrawn from the business, the evidential onus then passes to the respondent director to establish that the sums were applied for a proper purpose. The ruling also highlights the importance of: companies maintaining proper books and records, the basic need to back a party’s statement of case with evidence. In the absence of relevant company records and any witness statement, the court was entitled to conclude that the company’s funds had been misapplied. The judgment also illustrates the need expressly to plead...

Restructuring & Insolvency weekly highlights—10 April 2025 In this issue: Key R& I law developments Corporate insolvency Restructuring Directors and insolvency Insolvency litigation Property insolvency R& I in Scotland International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New Q& As Key R& I law developments CTJ appoints Agnello KC as Insolvency and Companies Court Judge The Courts and Tribunals Judiciary of England and Wales has confirmed the appointment of Raquel Agnello KC as an Insolvency and Companies Court Judge, with effect from 16 April 2025. Called to the Bar ( Inner Temple) in 1986, she has served as a deputy Insolvency and Companies Court Judge since 2016. See: LNB News 07/04/2025 29. Companies House rolls out identity verification service Companies House has unveiled a voluntary identity...

Vesnin v Queeld Ventures Ltd and another company [2025] EWHC 104 ( Ch) What are the practical implications of this case? The ruling is of practical and procedural importance for practitioners working on cross-border insolvency and asset recovery. It confirms that a party must show a legitimate interest in the bankruptcy to have standing to resist a common law recognition application—such as a creditor, the bankrupt, or a party with a concrete economic stake in the bankruptcy acting in the same capacity from which that stake arises. A merely commercial or tactical interest—like attempting to thwart a claim to title to shares, as here—is insufficient. Advisers for prospective respondents should therefore consider whether their clients possess the requisite interest in the bankruptcy and advise accordingly. The court did not define what amounts to a tangible economic interest in the insolvency, though possible classes could...

Wilson v The Secretary of State for Business and Trade [2025] EWHC 691 ( Ch) What are the practical implications of this case? This decision underscores the need to furnish complete, candid evidence when seeking relief under the CDDA 1986, s 17, and to observe any interim permission terms. Even though the allegations of unfitness did not relate to trading to HMRC’s prejudice, the court scrutinised the companies’ tax positions. Permission was not refused simply because of historic arrears or the presence of time to pay arrangements. The applicant’s conduct was pivotal. His first and second affidavits contained ‘material self-serving inaccuracies’ (para [97]). His account lacked openness. He intentionally attempted to obscure the companies’ history of tax non-payment and late payment (see para [89]) and did not fully cooperate with the Secretary of State’s requests for information (see para [101]). In addition, he...

Portland Stone Firms Ltd v Albert Goodman LLP [2025] EWHC 702 ( Ch) What are the practical implications of this case? This decision clarifies the court’s approach to disputed debts at both petition and injunction stages. It stresses substance over form and centres on whether there is an indisputable sum above the statutory threshold. Disputed facts do not, without more, require the petition’s dismissal; the court will interrogate the evidence in depth to see if the dispute is tenable. At the interlocutory injunction stage, identifying an undisputed liability—or one not realistically disputable on substantial grounds—is sufficient for the petition to proceed. Proof of cash flow solvency alone will not justify restraining the presentation or advertisement of the petition in such a scenario, even where the chances of convincing the court at the petition hearing that the company is insolvent are slim. The court need not pinpoint the exact amount due,...

In this issue: Corporate insolvency processes Personal insolvency Directors and insolvency Financial institutions R& I in Scotland Daily and weekly news alerts Key dates for restructuring and insolvency professionals New Q& As Corporate insolvency processes Interpreting the term ‘premises’ in relation to a contested winding-up petition ( Odeon Arcade Ltd v Smartestenergy Business Ltd) Here, the court was required to interpret paragraph 3(1) of Schedule 6 to the Electricity Act 1989 ( EA 1989) when considering a bid to prevent the advertisement of a winding‑up petition. It decided there was no basis to read the term ‘premises’ in that provision as ‘the whole premises’. Consequently, any deemed contract(s) under that paragraph of the EA 1989 is between the supplier and the person(s) actually taking the supply. Accordingly, liability tracks usage rather than ownership, save where the premises are...

Odeon Arcade Ltd Company v Smartestenergy Business Ltd [2025] EWHC 571 ( Ch) What are the practical implications of this case? This ruling will attract wide attention across a range of practice areas, as it distinctly illustrates a situation in which the court refuses efforts to distort the plain and ordinary wording of a statutory provision, affirming the priority of natural language over strained constructions. Its most tangible impact lies in the property sphere, offering a straightforward steer on who bears liability under the EA 1989 for electricity charges within multi-let or multi-unit buildings, especially where supply is distributed to numerous occupiers via shared arrangements. Because the dispute emerged from an application to prohibit the presentation of a winding-up petition, insolvency specialists will also find it instructive as a demonstration of the famous test set out by Mr Justice Norris in Angel Group Ltd v...

In this issue: Key R& I law developments Corporate insolvency processes Directors and insolvency Insolvency litigation Financial institutions International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals Key R& I law developments Spring Statement 2025—key Restructuring & Insolvency announcements During the Spring Statement 2025 on 26 March 2025, the Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, set out a number of measures pertinent to Restructuring & Insolvency professionals, covering action on phoenixism, reform within the public sector, fostering business growth, changes to business rates, and the stock of outstanding tax debt. Refer to: LNB News 26/03/2025 51. Corporate insolvency processes Insolvency Service reports closure of Manchester tech firms over debit subscription scam Per the Insolvency Service, the High Court in Manchester has wound up Affinity Technology Solutions Limited and RCSR Tech Limited following an inquiry into unauthorised direct debit subscriptions. The firms allegedly took £29.99 a month for online...

Purkiss (as liquidator of Ethos Solutions Ltd) v Kennedy and others [2025] EWCA Civ 268 What are the practical implications of this case? Insolvency office-holders confronted with disputed tax liabilities should scrutinise this ruling closely and consider the judgment carefully. In substance, it curtails the use of Insolvency Act 1986, section 423 proceedings against individuals who were attempting to reduce their tax burdens through avoidance. At paragraph [29], Lord Justice Newey observes that Parliament was unlikely to have intended section 423 to catch this form of “tax mitigation”, or to stretch that provision so far. Such mitigation, of the type identified by Lord Goff in Ensign Tankers, is not ordinarily regarded as improper within practice. As Lord Tomlin stated in IRC v Duke of Westminster [1936] AC 1 at 19, every person is entitled, if able, to arrange their affairs so that the tax payable under the...