Legal News

In this issue: Key R& I law developments Corporate insolvency processes Personal insolvency Restructuring Directors and insolvency Insolvency litigation R& I in Scotland Daily and weekly news alerts Key dates for restructuring and insolvency professionals Key R& I law developments Insolvency Service publishes monthly insolvency statistics for December 2024 The Insolvency Service has issued its monthly insolvency figures for December 2024, covering corporate and personal cases in England and Wales. The figures indicate there were 1,838 company insolvencies, 6% fewer than in November 2024 and 14% down on December 2023. For individuals, total insolvencies in December 2024 were 10,050, similar to November 2024 and 23% higher than December 2023. See: LNB News 21/01/2025 16. Companies House announces implementation dates for key regulations of the ECCTA 2023 Companies House has published an updated transition plan for the Economic Crime and...

Mittal and another v Berthier and others [2024] EWHC 3122 ( Ch) What are the practical implications of this case? A single creditor, or several together, can help determine the fate of a company as it emerges from administration, including whether it is dissolved or moved into liquidation. Frequently, creditors look on while administrators finish their tasks and state that no viable recovery claims exist against past directors or other parties, yet those creditors may harbour doubts. Even when administrators have liaised suitably with creditors, they can still be left thinking that more could be pursued and that their opinions have not been taken into account. In short, the decision can be shaped by creditor influence......

In this issue: Personal insolvency Restructuring Directors and insolvency Financial institutions R& I in Scotland International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New content Personal insolvency Statutory demands withstand challenge to ‘on demand’ terms ( Murfet v Property Lending) The appeal failed and Chief ICC Judge Briggs’s decision remained in place, refusing the bids by Mr Murfet and his mother to set aside statutory demands issued by the respondent lenders. The ruling emphasises the weight given to precise contractual language, confirming that where borrowing is stated to be repayable ‘on demand’, the courts will ordinarily hold parties to that bargain. Consequently, borrowers who accept such provisions—or do not secure alternative wording—will face an uphill struggle persuading a court to later adjust or ‘mend’ the agreement. See News...

What are the practical implications of this case? This notable judgment addresses three discrete themes of particular significance. First, it revisits the Harman undertaking, which prohibits collateral use of documents obtained on disclosure in civil litigation. Deploying materials produced on disclosure in Australian proceedings to support an anti-suit injunction in England constitutes a breach of that obligation. Second, it assesses the duty of full and frank disclosure on without notice and short notice applications, together with the limited circumstances in which the court may properly exercise its discretion not to set aside an order procured in breach of that duty of full and frank disclosure. Finally, the decision offers a considered treatment of the doctrines of actual and ostensible authority, in a scenario where a company seeks to place reliance on engagement letters executed by a separate entity within the same corporate...

Malik and others v Messalti [2024] EWHC 2713 ( Ch) What are the practical implications of this case? The emphasis under IA 1986, s 423(3) lies on the transferor’s subjective aim, rather than the consequences of the disposition. A transfer for less than full value can be impugned under IA 1986, s 423 where the transferor’s broad, abstract intention is to keep assets out of creditors’ reach, even without contemplating any specific existing or prospective creditor or class. There is no requirement for the transferor to know of any, or all, actual or potential creditors at the time of the transfer. A gift, or a declaration of trust, is only vulnerable if the prohibited purpose is proved (though it need not be the sole reason for the deal). The transferor’s awareness (or lack of awareness) of particular creditors may inform the factual inquiry into...

Murfet v Property Lending LLP [2024] EWHC 2787 ( Ch) What are the practical implications of this case? The ruling confirms that Applicants seeking to set aside a statutory demand by asserting a ‘genuine triable issue’ ( Insolvency ( England and Wales) Rules 2016, SI 2016/1024, r 10.5(5)(b)) cannot advance ‘ Micawberist’ arguments that the ‘factual matrix’ might evolve following disclosure. Mr Justice Thompsell’s judgment makes clear that such speculative pleas will not suffice. The court also reiterated that where commercial counterparties have agreed that borrowing is repayable ‘on demand’, those contractual terms will usually be enforced. Borrowers who were content to contract on that basis (or failed to secure different wording) will face an uphill task later in persuading the court that the bargain should be ‘mended’. A further notable element is the discussion of the Unfair Contract Terms Act 1977 ( UCTA 1977)....

IPS Law Llp v Safe Harbour Equity Distressed Debt Fund 3 Lp [2024] EWHC 2663 ( Ch) What are the practical implications of this case? The judgment is a lesson in slicing through wide‑ranging, intricate objections that practitioners too often encounter from companies resisting winding‑up petitions, aimed at surmounting what is frequently a comparatively low threshold of showing a genuine dispute on substantial grounds. Creditors and their legal representatives are likely to applaud the outcome when met with a haze of points raised to obscure the true issues. The court made clear it will devote the necessary time to examine and test voluminous, complex material to determine whether the petition debt is genuinely disputed on substantial grounds. The ruling also underlines the consequences of failing to adduce clear and convincing evidence—an omission that proved fatal here. This authority will be of real use to...

In this issue: Key R& I law developments Corporate insolvency processes Personal insolvency Restructuring Directors and insolvency Insolvency litigation Partnership insolvency R& I in Scotland International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals Key R& I law developments Guidance on the information sharing measures in the Economic Crime and Corporate Transparency Act 2023 has been updated The government website now features refreshed guidance on the Act’s voluntary information‑sharing provisions. These permit regulated firms to exchange customer information to assist in preventing, investigating and detecting economic crime, and are intended to offer greater clarity and assurance when sharing relevant data. See: LNB News 20/12/2024 58. Information Sharing ( Disclosure by the Registrar) Regulations 2024 SI 2024/1378: These Regulations empower the registrar to disclose information to specified...

Re Sino- Ocean Group Holding Ltd [2024] EWHC 2851 ( Ch) What are the practical implications of this case? This judgment gives practitioners a useful illustration of how CA 2006, Pt 26A can be deployed in a cross‑border restructuring, of that mechanism in practice, alongside a parallel scheme of arrangement, in this case conducted in Hong Kong. It also assists practitioners through the court’s analysis of the principles on class composition set out in Re Virgin Atlantic Airways Ltd [2020] BCC 997; Re Virgin Active Holdings Ltd [2021] EWHC 814 ( Ch) and Re AGPS Bondco plc [2024] BCC 302. On the one hand, a class should be limited to those whose rights are not so different as to make, on the facts of each case, collective consultation in their shared interests impracticable—in short, is there more that unites than divides them? On the other hand, in a CA...

Re Light Sa Em Recuperação Judicial [2024] EWHC 2733 ( Ch) What are the practical implications of this case? The High Court’s endorsement of the Scheme carries notable practical consequences for international restructuring practice, especially in cross‑border insolvencies. First, the matter showcases the adaptability and usefulness of English law and the English courts in delivering sophisticated multinational restructurings, including for entities with no UK domicile. By approving a Scheme that shifted the governing law from New York to English law solely to implement the restructuring, the court evidenced a pragmatic willingness to enable effective reorganisations of overseas businesses. Second, the ruling spotlights the centrality of international enforceability and recognition to cross‑border restructuring techniques. The court examined whether the Scheme would be recognised in Brazil, the principal jurisdiction of Light SA’s operations, and considered prospective recognition in the US on comity grounds. This underlines the...

Gill v Gill and others [2024] EWHC 2876 ( Ch) What are the practical implications of this case? The judgment offers a concise articulation of the principles governing unfair prejudice petitions, stressing that the fitting remedy will be shaped by the facts of each case. It also underscores the importance of meticulous pleadings in this context. Despite the often emotive nature of such disputes, the court warned against the ‘fastidious and narrow-minded pursuit of every conceivable category of financial compensation’. The early, consensual instruction of a single joint expert signifies that the parties anticipate any relief, if granted, will take the form of a share purchase order; otherwise, the exercise would squander time and expense. Subsequently attempting to pursue additional routes apparently encompassed by the expert’s remit is unlikely to gain traction and will attract costs...

Jones v Aston Risk Management Ltd [2024] EWHC 2553 ( Ch) What are the practical implications of this case? The ruling confirms that a director’s continuing links with non-trading or winding-down companies—such as unpaid loans and the performance of directors’ duties—do not, without more, amount to ‘carrying on business’ for jurisdictional purposes. This is especially pertinent where entities are being wound up. Advisers should scrutinise the substance and quality of any ongoing role, rather than simply noting residual ties. A clear line must be drawn between acts undertaken as a director/shareholder and conduct that amounts to a separate business. Directors’ loans, outstanding debts or comparable arrangements are, on their own, inadequate to establish jurisdiction, even where the sums are substantial and the relationship continues for a lengthy period. Providing guarantees for company liabilities and injecting funding are treated in the same way for...

Nardelli and others v Richardson and another [2024] EWHC 2740 ( Ch) What are the practical implications of this case? From the standpoint of office-holders and their advisers, the ruling provides reassurance, confirming the consistently demanding bar for applications to remove them. It will reassure office-holders and advisers because it underlines how exacting that test remains in practice. Set against that is the theme in the judgment that the administrators had generally: identified the paragraph 3, Schedule B1 Insolvency Act 1986 objectives and kept them under continual review; assessed the material before them; sought out and followed suitable external advice; and, critically, while noting creditors’ and shareholders’ views, preserved their independence at all times. Those features were central to the assessment of their conduct. Seen this way, the decision serves as a practical illustration of a proper response when a creditor already in a...

Restructuring & Insolvency weekly highlights—19 December 2024 In this issue: Key R& I law developments Corporate insolvency processes Directors and insolvency Insolvency litigation Creditors’ participation R& I in Scotland International restructuring and insolvency Daily and weekly news alerts Key dates for restructuring and insolvency professionals New Practice Note— Restructuring and insolvency Highlights 2024/2025 Key R& I law developments Insolvency Service publishes monthly insolvency statistics for November 2024 The Insolvency Service has issued its November 2024 statistics for England and Wales, covering both corporate and individual cases. There were 1,966 corporate insolvencies—13% higher than October 2024, yet 12% down on November 2023. Individual insolvencies reached 10,012, a 12% rise from October 2024 and 25% above November 2023. See: LNB News 17/12/2024 35. Corporate insolvency processes What comprises an ‘unregistered company’ under section 220(1) of the Insolvency Act 1986? ( East Riding of Yorkshire Council v KMG) KMG (the Fund) is an investment fund established in Luxembourg and regulated by...

Alpha Schools ( Holdings) Ltd v Signal Alpha III Fund LP [2024] EWHC 2862 ( Ch) What are the practical implications of this case? Submissions in this matter dwelt on the gravity of pleading fraud to resist a petition debt, and how far a cross-claim must be set out in particulars. The court confirmed it will look to the essence of the allegation, even where not every element of the proposed cross-claim can yet be specified. The successful opposition here offers a useful comparator for debtors assessing whether they have adequate material to advance a like contention. For creditors, the decision reiterates the need for care when drafting any paper intended to fix liability on a debtor. Documents such as a term sheet will not automatically amount to a binding agreement. Although not explored extensively given the finding on...

Re VTB Capital plc (in administration) [2024] EWHC 2612 ( Ch) What are the practical implications of this case? While the judgment does not spell it out, the application seems to have proceeded under paragraph 76(2)(a) of Schedule B1 to the Insolvency Act 1986 ( IA 1986). VTB was not in special administration, and Schedule B1 to IA 1986 applied, subject only to the modifications introduced by the Credit Institutions ( Reorganisation and Winding up) Regulations 2004. There is no statutory cap on the duration of any extension a court can grant under IA 1986, Sch B1, para 76(2)(a); the appropriate period is fact-sensitive. Any period requested should represent a credible, principled estimate of the time required to meet the administration’s purpose—for instance, completing sales of residual assets or recovering sums due by instalments over a defined timeframe. The application should...

Consult Practice Note: Requisitioned decisions...

East Riding of Yorkshire Council, as the administering authority for East Riding Pension Fund, v KMG SICAV- SIF- GB [2024] EWHC 2845 ( Ch) What are the practical implications of this case?......

Invest Bank PSC v El- Husseini and others [2024] EWHC 2976 ( Comm) What are the practical implications of this case? The decision underlines the necessity of articulating claims with clarity and exactness; where reliance is placed on inference, the foundational facts said to justify the conclusion must be set out. Litigants often contend that so-called pleading skirmishes are sterile, deployed merely to deflect scrutiny of the merits, and that it is 'wrong to construe a pleading like a statute' (per Lewison LJ in Ultraframe ( UK) Ltd v Fielding [2005] EWHC 1638 ( Ch) at [120]). Yet, in cases alleging dishonesty, grave misconduct or other discreditable behaviour—particularly when the case depends on inferences drawn from primary facts—strict adherence to the Three Rivers District Council v Governor and Company of the Bank of England ( No 3) [2003] 2 AC 1 pleading...

In this issue: Key R& I law developments Pensions and insolvency Directors and insolvency Insurance and insolvency Daily and weekly news alerts Corporate Rescue and Insolvency ( December 2024 edition) Key dates for restructuring and insolvency professionals Key R& I law developments High Court elucidates, in particular, the status of sole directors under the Model Articles and the complex relationship between UK sanctions rules and the in‑court appointment of administrators ( Re KRF Services ( UK) Ltd). This High Court decision—addressing two significant issues in UK company law and the sanctions framework—will be of interest to insolvency practitioners, corporate and restructuring counsel, sanctions specialists, and businesses and individuals affected by sanctions. First, it clearly settles how the Model Articles apply to single directors of private limited companies. The court held that a sole director may validly and...