Legal Practice Notes

Who can make an out-of-court administration appointment outside of court opening hours? Where an urgent administrator appointment is needed but the court is closed, a qualifying floating charge holder ( QFCH) may file a notice of appointment with the court despite it not being open to the public. This is permitted only while the court is closed, and the QFCH may submit the notice by: faxing the relevant form to the designated telephone number; or emailing it, either in the message or as an attachment, to the designated email address. The usual entitlement criteria remain, including giving sufficient notice to any prior floating charge holder and ensuring the floating charge has become enforceable. For more detail, see Practice Notes: Out-of-court administrator appointments—who can appoint and in what circumstances?, Out-of-court administration appointments by a QFCH—the procedure and Security review checklist. How is the appointment made? What...

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...

ARCHIVED : This Practice Note addresses the position that arises where the UK and the EU fail to reach arrangements for the cross-border enforcement of judgments after the UK’s departure from the EU. During the implementation period that commences on exit day—that is, the day the UK leaves the EU—the provisions of the withdrawal agreement will apply throughout that period for enforcement. For guidance on the implementation period and the effect of the withdrawal agreement on enforcement, see Practice Note: Brexit implementation period—enforcement [ Archived]. This archived note examines, in particular, the implications of a no-deal exit for the enforcement of judgments arising from civil and commercial claims under the following instruments, namely: Brussels Convention, Regulation ( EC) 44/2001 ( Brussels I), Regulation ( EU) 1215/2012 ( Brussels I (recast)), Lugano Convention 2007 and EC- Denmark...

ARCHIVED: This Practice Note addresses the scenario in which the UK and the EU fail to secure arrangements for the service of documents after the UK’s departure from the EU. Throughout the implementation period commencing on exit day, ie the date the UK leaves the EU, the terms of the withdrawal agreement apply. For direction on that period and how the withdrawal agreement affects service, see Practice Note: Brexit implementation period—service of documents [ Archived]. The Note also examines the position if the UK exits the EU without a deal in relation to serving court documents. The following UK instruments made for a no deal Brexit affect service: The Service of Documents and Taking of Evidence in Civil and Commercial Matters ( Revocation and Saving Provisions) ( EU Exit) Regulations 2018, SI 2018/1257, which repeals the principal EU measure in this field, ie...

Although every litigation funding agreement ( LFA), along with its related papers, will in practice differ based on the financier and the nuances of the case being financed, there are core matters that must be tackled during the distinct stages of negotiation. This Practice Note forms part of a concise series of short Practice Notes by Tanya Lansky and Tets Ishikawa, Managing Directors at Lion Fish Group Ltd, designed to give participants involved in negotiating and assessing LFAs and their ancillary documents a clearer grasp of the relevant dynamics at play. Investment top-ups One plans for, and trusts, that the budget settled at the start of an LFA will suffice in full. Yet, because litigation is uncertain, there is always a possibility the initial budget proves materially insufficient, prompting a requirement to increase the investment sum agreed. Whilst some prefer to address top-up...

Although every litigation funding agreement ( LFA), together with its associated documents, will differ according to the funder and the particularities of the matter being financed, there are recurring issues that must be addressed throughout the negotiation stages. This Practice Note is part of a short series of Practice Notes by Tanya Lansky and Tets Ishikawa, Managing Directors of Lion Fish Group Ltd, created to give those negotiating or assessing LFAs and their accompanying documents a clearer grasp of the factors in play. Control A frequent question for stakeholders considering litigation funding is how a funder’s involvement in a financed case might translate into control. Funders should not be directing a funded claim; this is commonly handled by an express clause confirming that the litigant retains sole conduct of the proceedings. However, when negotiating an LFA, one should be alert to the nuances that can attach to any...

Throughout this Practice Note, the terms ‘borrower’ and ‘mortgagor’ are treated as equivalent, and likewise ‘lender’ and ‘mortgagee’. This Practice Note applies to fixed charges as well, although it does not examine the marginal practical distinction between a fixed charge and a mortgage—see Practice Note: Mortgages for further reading on this topic. Priority of mortgages over registered land Under registered land, where several loans are secured over the same property by separate mortgages, each mortgagee is entitled to be paid out of the sale proceeds strictly and in accordance with the mortgages’ order of priority. The basic rule is that any two charges rank in the sequence of their creation ( Millet J in Macmillan Inc v Bishopsgate Investment Trust plc ( No 3))......

This Practice Note considers the position regarding the diligence of money attachment in Scotland. This Practice Note examines the current position on money attachment diligence in Scotland, and directs readers to related materials. For guidance on: alternative diligence options within Scottish civil procedure, refer to Practice Note: Enforcement in Scottish civil litigation, which, in turn, signposts detailed guidance on a number of diligence mechanisms available in Scotland the comparable position in England and Wales, see Introduction to enforcement—overview, which, as well as offering an overview of this topic, links through to more detailed guidance on various aspects of domestic enforcement in England and Wales enforcement across borders, consult Practice Note: Cross‑border enforcement—a guide for dispute resolution practitioners, which, as well as setting out an overview of this topic, links through to more detailed guidance on various aspects of...

ARCHIVED: This archived Practice Note reviews the administration of Monarch Airlines that occurred in 2017. It is not being maintained and is provided solely for background reference. It forms part of a broader suite of Practice Notes on airline insolvency. For further details, see: Guide to airline insolvency—introduction Guide to airline insolvency—insolvency processes, receivership, restructuring plans and schemes of arrangement Guide to airline insolvency—international considerations Background and lead-up to administration Before entering administration on 2 October 2017, Monarch Airlines operated scheduled services for tour operators, travel agents and direct customers, flying to and from five UK airports— Birmingham, Leeds- Bradford, Gatwick, Luton and Manchester—to 44 destinations, the majority in the Mediterranean and the Canary Islands. In common with many carriers worldwide, it faced tough market conditions and undertook a significant restructuring in 2014. The group returned to profit in 2015. However,...

This Practice Note outlines key authorities and related materials on misfeasance claims against administrators under paragraph 75 of Schedule B1 to the Insolvency Act 1986 ( IA 1986). The authorities are arranged by theme and cover: the applicant whose conduct is capable of examination scope of an administrator’s duties allegations to be advanced permission relief costs For further detail on this subject, see Practice Note: Misfeasance claims against administrators under paragraph 75 of Schedule B1 to the Insolvency Act 1986. The applicant Names of parties: Uralkali v Rowley [2020] EWHC 3442 ( Ch) Judgment date: 15 December 2020 Case summary: A failed bidder in an administration sale (who is neither a contributory nor a creditor) falls outside the reach of IA 1986, Sch B1, para 75......

Background The coronavirus ( COVID-19) outbreak triggered unparalleled social distancing requirements and nationwide lockdowns. Consequently, courts—and those who use them—were severely hindered in performing routine functions both administratively and practically. In turn, the judiciary adopted fresh protocols and processes, with operational arrangements being reshaped at pace and hearings adjusted accordingly on an urgent basis. See Practice Note: Coronavirus ( COVID-19)— Changes to the court process in insolvency proceedings [ Archived]. To build on these steps, and to address particular difficulties arising in insolvency matters, a Temporary Insolvency Practice Direction ( TIPD) came into force on 6 April 2020. It addressed COVID-19 issues including court procedure and permitting virtual statutory declarations for commencing administration proceedings where distancing rules applied, together with assorted insolvency points that were unclear under the Insolvency ( England and Wales) Rules 2016 ( IR 2016), SI 2016/1024 and affected by...

Statutory declaration of solvency A company proceeds into voluntary liquidation once its members approve a special resolution to do so. For further detail, see Practice Note: What is a members’ voluntary liquidation and when is it typically used? Before members can vote on that resolution, the directors must determine whether the company will discharge its debts in full, together with interest at the official rate (as defined in section 251 of the Insolvency Act 1986 ( IA 1986)), within no more than 12 months from the commencement of the winding-up. If that test is met, the company may enter a members’ voluntary liquidation ( MVL). If not, it should go into creditors’ voluntary liquidation ( CVL). For more information, see Checklist: Directors' due diligence questionnaire and guidance before swearing a statutory declaration of solvency for a members' voluntary...

The Insolvency ( Scotland) ( Receivership and Winding up) Rules 2018 The Insolvency ( Scotland) ( Receivership and Winding up) Rules 2018 ( ISRWR 2018), SSI 2018/347, were presented to the Scottish Parliament on 14 November 2018 and took effect from 6 April 2019. As a result, these Rules altered the procedure for members’ voluntary liquidations ( MVLs) in Scotland. Later, the Insolvency ( Scotland) ( Receivership and Winding Up) ( Amendment) Rules 2021 ( ISRWAR 2021), SI 2021/1025, were placed before the Scottish Parliament on 9 September 2021 and commenced on 1 October 2021. These subsequent Regulations amend the original Rules. Accordingly, this Practice Note addresses the law, procedures and practice governing Scottish MVLs from 6 April 2019 onwards, as contained in ISRWR 2018, SSI 2018/347, Part 3, and ISRWAR 2021, SI 2021/1025, Part 2. What is an MVL? An MVL is the...

When a company’s matters have been fully and finally concluded, the liquidator is required to prepare a statement of the liquidation, detailing the manner in which it was carried out and the disposal of the company’s assets. A copy of this statement must be sent to company members and the Registrar of Companies within 14 days, counting from the date the statement is prepared and completed. Before doing so, the liquidator must serve notice on the company’s members, enclosing the proposed final account, and provide at least eight weeks’ notice of the specified date on which the final account is intended to be delivered to them by the liquidator on that date......

This note aims to: offer practical pointers to creditors owed funds by a distressed or insolvent company set out the standing of creditors across the main forms of corporate insolvency outline steps a creditor can take to strengthen their position if formal insolvency begins—both beforehand and once underway This guide does not cover: individual bankruptcies. See Practice Note: Creditors’ bankruptcy petitions—grounds and documents required for presentation partnerships. See General partnerships and insolvency—overview the finer detail of corporate insolvency procedures debt recovery routes against solvent, trading companies Where a company is insolvent and cannot meet debts as they fall due ( IA 1986, s 123), the estate available to satisfy claims is finite. As a result, unsecured creditors commonly recover little, if anything (see Practice Note: Where the value breaks and negotiating...

Where are MAC clauses used in facility agreements? The concepts of material adverse change ( MAC) and material adverse effect ( MAE) generally feature in three parts of a facility agreement: Definitions—typically including a defined term for Material Adverse Effect Representations—usually containing a statement that no material adverse change has taken place Events of default—often capturing any situation likely to have a material adverse effect as a default trigger This Practice Note includes: a sample MAE definition, with accompanying drafting notes a sample MAC representation, together with drafting notes a sample MAE event of default, with drafting notes It is also usual for borrowers to try to qualify particular representations, undertakings and events of default by reference to material adverse effect......

Insolvency law and admiralty or shipping/maritime law Insolvency and admiralty or shipping/maritime law routinely involve cross-border dealings and assets spread across several jurisdictions. Over time, each area has developed mechanisms to recognise foreign legal regimes and to move towards harmonisation, whether through evolving practice or by unifying rules via international conventions. Nevertheless, these disciplines have largely progressed independently, paying limited attention to one another. As a result, although both seek international coherence, real points of friction have emerged between insolvency and maritime practice, which parties confronting a maritime insolvency must carefully consider... The principal obstacle to conventional insolvency pathways is the range of rights held by stakeholders in the shipping sphere over the key tangible assets of shipowners—namely, vessels—arising under: internationally recognised traditional maritime law (maritime liens) international conventions, for example the International Convention Relating to the Arrest of Sea- Going Ships,...

Banking regulation— Luxembourg— Q& A guide This Practice Note provides a jurisdiction-specific Q& A on banking regulation in Luxembourg, published in the Lexology Getting the Deal Through series by Law Business Research (law stated as at 7 February 2023). Authors: Loyens & Loeff— Adrien Pierre; Vanesa Gomez Pena. 1. What are the principal governmental and regulatory policies that govern the banking sector? Luxembourg is a leading financial centre, so nurturing the financial industry is a core policy aim. The Ministry of Finance partners with Luxembourg for Finance (the agency for the development of the financial centre) to promote, expand and diversify the Luxembourg financial centre, while identifying new opportunities. Digitalisation. Anti-money laundering and countering the financing of terrorism ( AML/ CFT). Sustainable finance. Financial education. Policies are being adapted as needed to respond to the covid-19 pandemic, to which the sector has shown strong...

Novation offers a route for a lender to move its interest in a loan to a different lender. This Practice Note explains what novation means before setting out the advantages when compared with other methods of transfer. It then highlights matters to consider, including consent, documentation and the effect on security. For an overview of key points in loan transfers more broadly, see Practice Note: Introductory guide to loan transfers. The following Practice Notes provide detailed guidance on other ways to transfer a loan: Transferring a loan by assignment Selling a loan by sub-participation For a precedent novation agreement, see Precedent: Deed of novation: for an unsecured bilateral facility agreement. What is novation? Under English law, novation is the sole means by which a lender can pass both its contractual rights and its contractual obligations to a new lender. Strictly speaking,...

STOP PRESS: The Loan Market Association ( LMA) has released refreshed editions of the standard terms and conditions for Par and Distressed Trade Transactions, the complete set of Funded Participation and Risk Participation Agreements, and the Secondary Debt Trading Documentation User Guide, with all changes taking effect from 17 March 2026. The changes cover deletion and removal of LIBOR references, detailed amendments to IBOR rate definitions and to the Target2 definition, together with revised ERISA representations that incorporate further exemptions from the prohibited transaction rules under ERISA and the US Internal Revenue Code. The refreshed documents are accessible exclusively to LMA members via the LMA’s Documentation Hub. Sub-participation enables a lender to pass its exposure in a loan to another entity. Within the loan market, it functions as an alternative to assignment or novation. For information on loan transfers in a lending...