Randi News Analysis Highlights – March

Lexis PSL Restructuring and Insolvency
monthly highlights
®
March 2015 highlights
March 2015 highlights from the Lexis®PSL R&I team. This month’s highlights include: the latest details
on the progress of the recast EC Regulation on Insolvency, the new requirement on IPs to provide
up-front fee estimates, the perils of having an inquorate meeting for out-of-court administration
appointments (Pui-Kwan v Kam-Ho) and more case updates and key insolvency news for the month.
Highlights this month are:
European Council announces new insolvency rules
The need to be up-front with creditors on fees
The importance of doing pre-appointment checks and doing them right
(Pui-Kwan v Kam-Ho)
Headlines (News updates & analysis)
• Chancellor announces case migration from Registrars to the County Court at Central London to reduce court
waiting times
• Achieving the purpose of an administration (Re BW Estates; Randhawa v Turpin)
• Accessibility of English bankruptcy to foreign debtors (JSC Bank of Moscow v Kekhman)
• Undertakings given on the appointment of a provisional liquidator (Abbey Forwarding (In liquidation) v Revenue and
Customs Commissioners)
• Annulling bankruptcy orders-limitation defences (Mowbary v Sanders)
Relevant updates from other practice areas
• Dispute resolution
• Banking & Finance
Trackers
New and updated on Lexis®PSL R&I
• New Practice Notes and checklists
Dates for your diary
Please click on the link above to read the article
Lexis®PSL R&I Highlights
March 2015
European Council announces new insolvency rules
On 12 March 2015, the European Council approved the draft
recast of the EU Insolvency Regulation which amends the EC
Regulation on Insolvency proceedings 1346/2000 (see version of
approved text here) and adopted its position at first reading.
The draft text includes more recitals than the version published
in December 2014, with some larger recitals having been divided
into two, and a new provision which introduces a committee of
representatives of member states to assist the Commission in
assessing further amendments.
The European Parliament (which agreed a compromise package
in relation to the new rules in November 2014) is expected to
adopt the text at second reading at its session in May or June
2015. The recast regulation will come into force on the 20th day
following its publication in the Official Journal of the European
Union.
The need to be up-front with creditors on fees
Insolvency practitioners will in future be required to provide
estimates of fees up-front to creditors under the Insolvency
(Amendment) Rules 2015, SI 2015/443, which will come into force
on 1 October 2015. For more details, see news analyses: The need
to be up-front with creditors on fees and The cost of reforming
insolvency practitioners’ fees.
The importance of doing pre-appointment checks and doing them right
(Pui-Kwan v Kam-Ho)
John McDonnell QC at 13 Old Square Chambers discusses
the judgment in Pui-Kwan v Kam-Ho [2015] EWHC 621 (Ch),
[2015] All ER (D) 133 (Mar) and its implications for insolvency
practitioners who agree to be appointed administrators out of
court by a company or its directors. The Companies Court held
that a company had never been placed in administration where a
meeting of its directors, purporting to enter it into administration,
pursuant to paragraph 22(2) of Schedule B1 to the Insolvency
Act 1986 (IA 1986), had been inquorate and that the purported
appointment of the administrator was a nullity which could not be
saved under rule 7.55 of the Insolvency Rules 1986.
As to the second issue, the court held that an administrator
can effectively ‘send’ a conversion notice (converting from
administration to liquidation) to the Registrar within the meaning
of IA 1986, Sch B1, paras 83(3) or 84(1) even if the notice arrives
at the Registry after his appointment has expired. For further
details, see news analysis: The importance of doing
pre-appointment checks and doing them right.
Headlines (News updates & analysis)
Chancellor announces case migration from
Registrars to the County Court at Central London to
reduce court waiting times
In an effort to reduce the current long waiting times to
appear before a Registrar in the High Court, the Chancellor, in
consultation with the court users’ committee, has agreed that
certain cases that would usually appear before a Registrar in
the High Court may now be transferred to the County Court at
Central London and be heard before a District Judge with effect
from 6 April 2015 (see LNB News 26/03/2015 160).
Achieving the purpose of an administration (Re BW
Estates; Randhawa v Turpin)
Stefan Ramel of Guildhall Chambers says Re BW Estates;
Randhawa v Turpin [2015] EWHC 517 (Ch), [2015] All ER (D) 27
(Mar) will be a comfort to administrators.
The sole issue for the judge was whether, at the time that the
administrators were required to state their proposals, they
could properly have taken the view that one of the purposes
of administration could be achieved. He ruled that it was
conceivable, in this case, that an administrator could achieve
one of the purposes of administration. Even in circumstances
where it is unclear exactly what strategy they should follow to
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Lexis®PSL R&I Highlights
March 2015
achieve one of the purposes of administration, the court is likely
to approach their opinion with some deference and is unlikely
to hold that they had no basis whatsoever for reaching it. For
further details, see news analysis: Achieving the purpose of an
administration.
Accessibility of English bankruptcy to foreign
debtors (JSC Bank of Moscow v Kekhman)
Michael Swainston QC at Brick Court Chambers examines the
decision in JSC Bank of Moscow v Kekhman [2015] EWHC 396
(Ch), [2015] All ER (D) 288 (Feb), on the accessibility of English
bankruptcy to foreign debtors. The Russian debtor sought to
invoke English jurisdiction and English bankruptcy law to secure
a transparent administration of his international affairs and to
assist with his business rehabilitation.
The judge held that a connection with the jurisdiction was
required, and that it existed in this case because of the debtor’s
English law liabilities, which were subject to English jurisdiction,
and which would abate as a result of an English bankruptcy. He
rejected the argument that an English bankruptcy order would
operate unfairly among creditors, essentially because the
objections taken were theoretical rather than real on the facts
of the case. In particular, the judge did not disturb the Chief
Registrar’s assessment that the order would not be recognised
in Russia. The real impact of an English order would therefore
be outside Russia - in England in relation to English law liabilities
subject to English jurisdiction, and in other jurisdictions which
may choose to recognise the English order depending on whether
they preferred free-for-all or orderly distribution. Accordingly,
there was no incursion on comity as against Russia. There was
also benefit to an English order because it would discharge the
debtor’s English law liabilities, and provide an opportunity for
his partial rehabilitation in England and/or in other jurisdictions
that recognised the order. For further details, see news analysis:
Accessibility of English bankruptcy to foreign debtors.
Undertakings given on the appointment of
a provisional liquidator (Abbey Forwarding
(In liquidation) v Revenue and Customs
Commissioners)
Matthew Weaver of St Philips Chambers comments on
Abbey Forwarding (In liquidation) v Revenue and Customs
Commissioners [2015] EWHC 225 (Ch), [2015] All ER (D) 91
(Feb) and whether undertakings given on the appointment of
a provisional liquidator can be enforced by the company in
liquidation. For more details, see news analysis: Undertakings
given on the appointment of a provisional liquidator.
Annulling bankruptcy orders-limitation defences
(Mowbary v Sanders)
Nick Brown, commercial litigation barrister at St Philip’s
Chambers , discusses the reasoning behind Re Julie Ann
Mowbray (A Bankrupt); Mowbray v Sanders (Trustee in
Bankruptcy of the Estate of Julie Ann Mowbray) [2015] EWHC
296 (Ch), [2015] All ER (D) 161 (Feb) and the practical lessons the
decision offers for insolvency office-holders on annulments. For
further details, see news analysis: Annulling bankruptcy orderslimitation defences.
Court ‘Likes’ notification via social media (Re A Debtor (No
0274 of 2010))
Derek Jones, of Harrison Clark Rickerbys, comments on Re
A Debtor (No 0274 of 2010) where the county court decided that
Facebook could be used to effect notification of bankruptcy
proceedings. For further details, see news analysis: Court ‘Likes’
notification via social media.
Relevant updates from other practice areas
Dispute resolution
Banking & Finance
Beating the fee hike-by 4pm
The Budget 2015 for banking and finance lawyers
From Monday 9 March 2015 the court fees that claimants
have to pay increased substantially, in some cases by almost
600%, only five days after the House of Lords rubber-stamped
the controversial measures. Catherine Baksi speaks to Keith
Etherington, civil litigation solicitor at Slater & Gordon and Law
Society council member for civil litigation, see news analysis:
Beating the fee hike-by 4pm.
With the Chancellor’s speech still ringing in our ears, we bring
together the most important features of the Budget 2015 for
banking and finance lawyers alongside expert analysis and
industry comment, see news analysis: The Budget 2015 for
banking and finance lawyers.
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Lexis®PSL R&I Highlights
March 2015
Trackers
There has been a development this month on the following case:
Names of parties
Court and citation
Subject
Current status
Changtel Solutions
UK (formerly Enta
Technologies) v
Revenue and Customs
Commissioners
Court of Appeal [2015]
EWCA Civ 29, [2015] All
ER (D) 211 (Jan)
Whether the First-Tier Tribunal (Tax Chamber) (the
tribunal) or the Companies Court was the appropriate
forum to determine whether the petition debt was
disputed in good faith on substantial grounds when
there was both an appeal against a VAT assessment
pending in the tribunal and a winding-up petition
pending in the Companies Court. The Court of Appeal
previously held that, when the tribunal had reached a
conclusion on such an issue, that decision was normally
likely to be a compelling factor in the Companies Court’s
exercise of discretion. That discretion was not, however,
completely abrogated by the jurisdiction of the tribunal.
It need not defer to the tribunal in every case, though it
might often choose to do so.
Applying for
permission to
appeal to the
Supreme Court
New and updated on Lexis®PSL R&I
New Practice Notes and checklists
The following new documents have been added:
• P
ractice Note: An insolvency lawyer’s guide to the Financial Services Compensation Scheme by Helen Plews and Ashley Smith of
CMS Cameron McKenna LLP
• Practice Note: The proper law doctrine by Sebastian Way, Skadden Arps Slate Meagher & Flom (UK) LLP
• Practice Note: Loan to value covenants by Rosling King LLP
• Practice Note: Receivers and VAT by John Baldry of Temple Tax Chambers
• Practice Note: Bankruptcy searches by Neeta Chenani of the Lexis®PSL R&I team
• C
hecklist: A summary checklist and timeline for an application for the suspension of automatic discharge from bankruptcy by
Frances Coulson and Sarah May of Moon Beever
• C
hecklist: A summary checklist and timeline for applications to lift a bankrupt’s suspension from discharge by Frances Coulson
and Sarah May of Moon Beever
Dates for your diary
Date
Time
Subjects covered
15 April 2015
15:30
LN/R3 Webinar: Privilege and disclosure - the rules and pitfalls featuring
Matthew Weaver (St Philips Chambers), Mark Gleeson (Squire Patton Boggs
(UK) LLP) and Frances Coulson (Moon Beever)
•
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