Friday, 30 October 2009
"In 1913 a series of provisional laws... provided for a general survey and revaluation of all lands in the [Turkish] Empire together with a readjustment of taxes. They also extended the right of inheritance and modernised the hypothecation as security for debts.It is questionable whether such attempts a reform can have the desired effect. They are, it is estimated, more likely to confuse the land system of Turkey, just as the existing complications in the Turkish civil, criminal and commercial courts were caused by successive attempts at modernisation. The truth is that a truly comprehensive land code, embodying and co-ordinating the whole of the existing laws of real property in a single statute, would be a great achievement. But this is more than can be expected.The reform that is needed and can be attained is a general and far reaching improvement in the administration of the laws. The impression of arbitrary action on the part of the officials and the removal of financial abuses would be of real and substantial value. A reform of methods, rather than of law, is required for the reconstruction of the Turkish agrarian system."
"...five law lords today said investors in Sigma should be treated equally and each take a proportional share of what remains...Adam Plainer, a partner at Jones Day who advised a late maturing investor, said: ""The law lords have ruled that the remaining assets should be split proportionally among all entitled creditors, which is a basic principle of UK insolvency law. [is it?? has anybody read Professor Mokal's highly persuasive work in the CLJ on pari passu? see here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=303739] When a business goes bust all creditors of the same class are usually treated equally and the law lords are saying a structured investment vehicle is no different, which is a victory for business common sense."
Thursday, 29 October 2009
- Bankruptcy Law and Practice in Ireland (Round Hall Press, Dublin 1991),
- International Rescue of Companies (Kluwer, The Hague, 1998).
- Insolvency Law (Cavendish Publishing, London, 2003).
"The current number of bankruptcies stands at 107,000 but is expected to a record annual level of 130,000 by the end of the year, according to personal insolvency experts Tenon Recovery.Mark Sands (pictured), the company's national head of bankruptcy, said: “I expected this year to be the worst on record but even I have been stunned by the level of personal insolvencies - we are sailing past the previous record and still have more than two months of the year to go.
“At this rate we expect to see as many as 130,000 personal insolvencies over the whole of 2009, an increase of 22 per cent on the levels seen in 2008.”
He added: “Even with interest rates close to zero, the effects of the downturn combined with the massive build up of consumer debt in the good years have created ‘a perfect storm’ that is sweeping more people into personal insolvency than ever before...”
Picture Credit: http://www.tenongroup.com/en/about-Tenon/contacts/s/Mark-Sands.aspx
"1. Published Cases BPIR 973Bateman v Williams  EWHC 1760 (Ch)ChD, David Richards J ,22 July 2009Bankruptcy - Family home - Sale and possession - Exoneration - Occupation rent - Insolvency Act 1986, s 323 BPIR 983Holland v Her Majesty's Revenue and Customs and Another  EWCA Civ 625,CA, Ward, Rimer and Elias LJJ, 2 July 2009Liquidation - De facto director - Misfeasance - Relief by the court - Insolvency Act 1986, s 212 - Companies Act 1985, s 727 BPIR 1029Masri v Consolidated Contractors International SAL and Another  UKHL 43HL, Lord Scott of Foscote, Lord Rodger of Earlsferry, Lord Walker of Gestingthorpe, Lord Brown of Eaton-Under-Heywood and Lord Mance, 30 July 2009Examination - Officer of judgment debtor - Civil Procedure Act 1997, s 1 - Civil Procedure Rules, Part 6 - Civil Procedure Rules, Part 71 BPIR 1047Nationwide Building Society v Wright  EWCA Civ 811CA, Maurice Kay, Lloyd LLJ and Sir John Chadwick, 29 July 2009Bankruptcy - Judgment creditor - Charging orders Act - Final charging order obtained between presentation of petition and bankruptcy order - Whether judgment creditor entitled to keep the benefit of the charging order - Whether charging order to be set aside - Charging Order Act 1979, s 3(5) - Insolvency Act 1986, s 346(1), (5) BPIR 1061Official Receiver v McKay  EWCA Civ 467CA, Mummery and Lloyd LJJ and Sir Paul Kennedy, 16 June 2009Bankruptcy annulment - Annulment on grounds that debts have been paid - Proof of only debt withdrawn - Grounds for annulment - Applicability of precedents determined under earlier Bankruptcy Acts BPIR 1075Official Receiver v MitterfellnerChD, Chief Registrar Baister, 10 June 2009Cross-border insolvency - EC Regulation on Insolvency Proceedings (No 1346/2000) - Whether bankrupt had centre of main interests in UK - Annulment of bankruptcy order - Consideration of factual evidence BPIR 1093Perpetual Trustee Co Ltd and Another v BNY Corporate Trustee Services Ltd and Another  EWHC 1912 (Ch)ChD, Sir Andrew Morritt CVO, Chancellor of the High Court, 28 July 2009Liquidation - British Eagle principle - Pari passu rule - Contracting out BPIR 1121Progress Property Co Ltd v Moorgarth Group Ltd  EWCA Civ 629CA, Mummery, Toulson and Elias LJJ, 26 June 2009Undervalue - Unlawful return of capital - Sale of shares between two companies sharing a common director and ultimate holding company - Sale negotiated by the common director - Sale at an undervalue due to miscalculation - Whether share sale amounted to unlawful distribution of the selling company's assets - Companies Act 1985, s 263 BPIR 1129Remblance v Octagon Assets Ltd  EWCA Civ 581CA, Ward, Mummery and Dyson LJJ, 17 June 2009Statutory demands - Setting aside - Position of guarantor where principal debtor has a cross claim - Discretion of court - Role of court in ensuring that justice was achieved in set-aside applications BPIR 1148Rottmann v Brittain  EWCA Civ 473CA, Ward, Keene and Lawrence Collins LJJ, 18 March 2009Examination of bankrupt - Public or private examination - Relevance of proceedings in Germany - Right not to self incriminate BPIR 1157Re Stanford International Bank Ltd  EWHC 1441 (Ch)  EWHC 1661 (Ch)ChD, Lewison J, 3 July 2009, 9 July 2009Cross-border insolvency - Receiver appointed by Texan court - Liquidators appointed by Antiguan court - Whether either entitled to recognition in Great Britain under the Cross¬Border Insolvency Regulations 2006 - Cross¬Border Insolvency Regulations 2006, Arts 2(g), 2(i), 2(j), 16.3, 17Cross-border insolvency - Centre of main interests - Meaning of centre of main interests for purpose of the Cross-Border Insolvency Regulations 2006 BPIR 1191Stone & Rolls Ltd (In Liquidation) v Moore Stephens (A Firm) and Another  UKHL 39HL, Lord Phillips of Worth Matravers, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood and Lord Mance, 30 July 2009Negligence - Auditor - Ex turpi causa BPIR 1291Supperstone v Hurst (No 5)  EWHC 1271 (Ch)ChD, Bernard Livesey QC sitting as a High Court judge, 9 June 2009Bankruptcy - Applications without merit against trustee in bankruptcy and his firm by bankrupt and bankrupt's wife - Extended civil restraint orders - Factors to consider in making order - Whether to extend order to prohibit communication with the trustee in bankruptcy and others - Civil Procedure Rules, r 3.11 - Practice Direction to Civil Procedure Rules r 3.11 BPIR 1304Syska and Another v Vivendi Universal and Others  EWCA Civ 677CA, Mummery, Longmore and Patten LJJ, 9 July 2009EC Regulation on Insolvency Proceedings - Arbitration proceedings - Effect of insolvency of one of parties to arbitration on continuance of arbitration - Choice of governing law."
Wednesday, 28 October 2009
Supreme Court judgment due on Thursday in In Re Sigma Finance Corporation (in administrative receivership) and In Re The Insolvency Act 1986 (Conjoine
Tuesday, 27 October 2009
Constitutional Reform and Governance Bill second reading - Bankruptcy Restriction Orders can cause pauper peers to be expelled from the House of Lords
"Government proposals to end the hereditary principle in the House of Lords will be debated today as the Constitutional Reform and Governance Bill has its second reading...
This is the latest stage of constitutional reform and contains a series of measures aimed at rebalancing the relationship between Parliament, the government and the public.
Lords' provisions contained in the bill will bring to an end the system of by-elections in the second chamber, which allows for the remaining 90 hereditary peers to be replaced by other hereditary peers when they die. They also provide for new powers to:
- allow members of the House of Lords to resign from the House
- give the House the power to expel or suspend peers found guilty of misconduct
- disqualify members of the Lords found guilty of a serious criminal offence, or who are subject to a bankruptcy restriction order."
"For an extended civil restraint order to be issued, making someone a vexatious litigant, three unmeritorious claims or applications were the bare minimum to satisfy the requirement of persistence.
Mr Edward Bartley Jones, QC, sitting as a deputy Chancery Division judge, so stated on August 6, 2009, in a reserved judgment when making extended civil restraint orders against John Michael Ludlam and Caroline Lesley Ludlam.
HIS LORDSHIP said that, for an extended civil restraint order to be made, it was a pre-condition that the relevant person had “persistently issued claims or made applications which are totally without merit”: see paragraph 3.1 of Practice Direction C in Part 3 of the Civil Procedure Rules.
When considering the making of such an order generally, the court was to engage in a graduated, and proportionate response to the identified abuse, which made it logical for the statutory scheme to have a higher precondition threshold for the making of an extended order as opposed to a limited or general order.
Mr Justice Warren's judgment in: Power & Anor v HM Revenue and Customs & Anor  EWHC 2580 (Ch) (23 October 2009)
"Mann J explained why, in his view, no trust (including a Quistclose-type trust) was created over monies paid to Agents prior to the cessation of trade on 10 October 2006. I agree with his analysis and conclusion. He also explained why he considered that there was a strong argument that monies paid to Farepak (including for this purpose monies paid to Agents), at a time when Farepak has decided to cease trading and at a time when it had indicated that payments should not be received, would be held by Farepak on a constructive trust from the moment they were received. Again, I agree with his analysis and conclusion. He further explained why he considered that the declaration of trust should be rectified to cover the FFG Current Account. Once again, I agree with his analysis and conclusions."
Monday, 26 October 2009
"It is a place best known as the inspiration for a host of Philip Larkin poems, its industrial heritage and unique cream telephone boxes. But today Hull is awarded a new title — the country’s insolvency capital.
Last year the northern city had the highest rate of personal insolvencies, at 26.6 bankruptcies per 10,000 adults, according to research from Wilkins Kennedy, the accountant. It was one of several coastal and seaside towns uncovered as the places where people were most likely to declare themselves bust. Plymouth registered 26 personal insolvencies per 10,000 adults, Poole, in Dorset, 22.4 and Bournemouth, its neighbour, 22.1.
Overall, the average rate of personal insolvencies in coastal towns was almost one third higher last year than the national average at 20.6 per 10,000 adults, compared with 15.7 across the country. Coastal cities accounted for seven of the ten towns and cities with the highest bankruptcy rates in the UK.
Among the UK’s 50 largest towns and cities, Cardiff is the only coastal city with a personal insolvency rate lower than the UK national average."
Friday, 23 October 2009
Lomas & Ors v RAB Market Cycles (Master) Fund Ltd & Ors  EWHC 2545 (Ch) (21 October 2009) - Mr Justice Briggs discussing admin expenses
"The question of what constitutes an administration expense is now governed by rule 2.67(1) of the Insolvency Rules 1986 (as amended). Both Mr Trower and Mr Sher submitted that the payments which the Administrators considered that they should make in the present circumstances fell within sub-rule (f), as being "any necessary disbursement by the administrator in the course of the administration …". Mr Trower submitted that although for the purposes of liquidators' expenses, the decision of the House of Lords in Re Toshoku Finance UK plc  1 WLR 671 had removed what was previously thought by some to be a general discretion in the court to identify particular debts as expenses, the flexible approach to that question in the context of administration adopted by Sir Donald Nicholls V-C in Re Atlantic Computer Systems plc Ch 505, at pages 527-8, remains good law.
- At paragraph 38 of his opinion in Toshoku, Lord Hoffmann said this, in relation to Sir Donald Nicholls' analysis in Atlantic Computer Systems:"The second point is the proposition that whether debts should count as expenses of the liquidation is a matter for discretion of the court. In my opinion there is no such discretion. Rule 4.218 determines what counts as expenses, subject only to the limited discretion under section 156 of the 1986 Act to re-arrange the priorities of expenses inter-se. The court will of course interpret rule 4.218 to include debts which, under the Lundy Granite Co principle, are deemed to be expenses of the liquidation. Ordinarily this means that debts such as rents under a lease will be treated as coming within paragraph (a), but the principle may possibly enlarge the scope of other paragraphs as well. But the application of that principle does not involve an exercise of discretion any more than the application of any other legal principle to the particular facts of the case."
- In my judgment that dictum is no less applicable to administration expenses than it is to liquidation expenses, subject to two caveats. The first is that the court habitually deals flexibly with applications for permission by, for example, secured creditors of a company in administration to enforce their security, or by landlords to forfeit a lease of property to the company. In such circumstances it is commonplace for the creditor to be restrained, for the better functioning of the administration, provided that the administrator discharges what would otherwise be unsecured liabilities, as they arise. The imposition by the court of such a condition for the refusal of permission to the creditor to enforce his security or forfeiture could convert a debt which might otherwise not be an administration expense into one that was.
- Furthermore, under the Lundy Granite principle itself, the retention by administrators of property for the benefit of the administration may mean that liabilities incurred by reason of that retention, although unsecured, become administration expenses. Mr Trower pointed me to the obiter dicta of Mr Warren QC in Re Japan Leasing (Europe) plc  BPIR 911 as a further example of the application of the same principle, where administrators adopted an agency contract of the company by accepting a payment proffered to it as agent, with the consequence that obligations to pay money arising under that contract after its adoption fell to be paid as administration expenses. Japan Leasing was of course decided prior to Toshoku, and before the substantial alignment of the administration expenses regime with that applicable to liquidation."
Interesting Press Release from R3: Memorandum of Understanding on redundancy and information sharing amongst relevant agencies
"Jobcentre Plus, the Insolvency Trade Body, R3 and the Insolvency Service have joined forces to develop a system to share information about possible job losses in struggling companies, helping to ensure that people threatened with redundancy are offered support quickly and efficiently.
The organisations signed a Memorandum of Understanding on 22nd October 2009 detailing how they will work together to share intelligence and knowledge, providing even better access to support, information and advice for anyone facing redundancy.
The Memorandum outlines how Insolvency Practitioners dealing with struggling businesses will work with Jobcentre Plus offices to develop a tailor-made plan for each situation. This will help to ensure that those affected by redundancy will be given rapid access to information and services that will help them claim benefits, identify new job opportunities or get access to training.
Jobcentre Plus’s Rapid Response Service is already offering its specialised help to large and small organisations and has helped over 2,500 organisations since it was re-launched in November. However, working more closely with R3 and the Insolvency Service will enable Jobcentre Plus to help more companies, more quickly so that people who have lost their jobs find new roles or training courses as quickly as possible.
Welcoming the agreement, Employment Minister, Jim Knight MP, said:
“It is important that we don’t just wait for someone to lose their job before we start to help them. The pre-redundancy service Jobcentre Plus offers has helped thousands of people get new jobs quickly – stopping a short term difficulty becoming a long term problem.
“It is essential that we work with R3 and the Insolvency Service to make sure even more people get help before they are out of work. I am hugely grateful to Phil Wilson and R3 in facilitating this agreement.”
The agreement has been developed by Jobcentre Plus, R3, The Insolvency Service and Sedgefield MP Phil Wilson, who set out practical steps each organisation could take to help employees when they face redundancy and strengthen their relationship.
Phil Wilson MP said: “I saw first hand in my constituency the need for Jobcentre Plus, administrators and the Insolvency Service to join up and help workers who are being made redundant. People in this situation are often confused and lack confidence in what to do next. Thanks to this memorandum, the Insolvency Practitioners will be able to signpost people towards the professional help offered by Jobcentre Plus. It is an excellent step forward and I would like to congratulate the work R3 and Jobcentre Plus have put in to getting this far.”
Peter Sargent, President of R3 commented:
“R3 welcomes the opportunity to be involved in helping to develop links between our members and local Jobcentre Plus offices. We know that the impact of redundancy on people can be devastating and we want to make sure that we do everything we can to lessen that”.
The agreement will be signed by Jim Knight MP, Minister for the Department for Work and Pensions, Ian Lucas MP, Minister for the Department of Business, Innovation and Skills, Phil Wilson MP for Sedgefield, Peter Sargent, President of R3, Stephen Speed the Chief Executive of the Insolvency Service and Sue Veszpremi, Head of Employer Engagement at Jobcentre Plus.
Speaking ahead of the signing, Ian Lucas MP, Minster for the Department for Business, Innovations and Skills said:
“In these difficult times it’s important that Government works with the insolvency profession to help people cope with the effects of redundancy and get back into work as soon as possible. This memorandum is an important part of that process and builds on the work the Government has already done to help workers and families cope with the economic downturn.”
The signing took place at the R3 Head Offices, 8th Floor, 120 Aldersgate St, London, EC1A 4JQ on the 22nd October 2009 at 8.00 am."