tag:blogger.com,1999:blog-63914769582309490912024-03-13T12:00:15.284+00:00Bankruptcy, Insolvency and Corporate RescueSome news and views from UK academia and practice on the law, policy and practice of insolvencyDr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.comBlogger890125tag:blogger.com,1999:blog-6391476958230949091.post-44048152945902548832011-06-15T07:03:00.043+01:002011-06-15T07:03:00.339+01:00Insolvency items in the news: insolvency defined and the Duchess and bankruptcy<div style="text-align: justify;"><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-rkFcXnqdKG0/TfekIJTHa_I/AAAAAAAABnA/-t2vW5jJJUU/s1600/duchess-of-york-460_885957c.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="250" src="http://4.bp.blogspot.com/-rkFcXnqdKG0/TfekIJTHa_I/AAAAAAAABnA/-t2vW5jJJUU/s400/duchess-of-york-460_885957c.jpg" width="400" /></a></div><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">The <a href="http://www.dailymail.co.uk/tvshowbiz/article-2003061/Finding-Sarah-Fergie-tears-recalls-childhood-beatings-mother.html">Daily Mail</a> and the Daily Telegraph are reporting that Sarah, </span></span><a href="http://www.telegraph.co.uk/news/uknews/theroyalfamily/8571793/Sarah-Ferguson-continually-on-verge-of-bankruptcy.html"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Duchess of York (pictured) is constantly in a state of near bankruptcy</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">. We have addressed the <a href="http://bankruptcyandinsolvency.blogspot.com/2010/08/duchess-of-york-and-bankruptcy.html">Duchess' liquidity issues before and the plight of some bankrupt peers</a>. This latest twist in the Duchess's finances might see her name added to that of the <a href="http://bankruptcyandinsolvency.blogspot.com/2010/08/daily-telegraph-on-debt-options.html">Duke of Manchester and Duke of Leinster as a ducal bankrupt.</a> The Telegraph note: </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><i>"</i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>In the first episode of Finding Sarah, her new six-part documentary series for Oprah Winfrey's television channel, the Duchess said: "I don't really understand finances at all".</i></span><br />
<div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>She is believed to be receiving £200,000 for taking part in the series, which sees her submit to a string of tearful therapy sessions with TV counsellors and experts.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>US television analysts have said the figure is "very low" compared to the sums paid even to medium-profile personalities in mid-ranking American reality TV shows.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"At the moment I'm just worried about paying off people that need to be paid off," the Duchess said. "There's three firms and three personal friends".</i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>..</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"I lost all my jobs, I lost all my staff, I lost everything," she said.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"I've tried very hard not to go into financial bankruptcy." The Duchess blamed her financial illiteracy on her years spent receiving an allowance from the Queen as the wife of the Duke. "When we got divorced I didn't know how to do anything," she said...</i></span></span></div><br />
<div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">In other news Mr John Kay has published an interesting article in the <i>Financial Times</i> which carries an exposition of the insolvency rules. The article is entitled: "</span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">New rules to protect the many from the few." The piece notes:</span><br />
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</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"...</span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>But in the past two decades many corporate collapses involved businesses that were not fundamentally bad but whose financial structures could not accommodate even modest setbacks. Bankruptcy of a corporate entity in these circumstances may have large, adverse and avoidable consequences for people who were not party to the original agreements. These issues arise for any business with a dominant market position or engaged in the production of a key public service. Elderly people who find that the bed on which they lie has been the subject of a financial transaction on which the lessee has defaulted are just a particularly hard case. </i></span><br />
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</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>In 1986 Britain created a new insolvency regime, loosely modelled on the US Chapter 11, designed to make it easier to continue the business of a failed company. In many respects, this has worked well – perhaps too well. Pre-packed administration deals are marketed as a means of escaping liability for over-rented property, while US airlines fly in and out of Chapter 11 almost as often as they fly in and out of Chicago, waving creditors goodbye without changing the pilot. A recent Office of Fair Trading report highlighted the too common phenomenon of the administrator who remains in charge of the business for several years until his own fees have exhausted the assets.</i></span></span><br />
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</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i><b>General insolvency rules are inadequate when</b> a care home, or a bank, or a water supply company fails. The first priority in these cases must be the residents, depositors and customers: creditors come after. We need special regimes for such businesses, </i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>which would limit gearing, without discouraging entrepreneurs looking to enter these sectors. </i></span><br />
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</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>A resolution authority, more powerful than the existing Insolvency Service, could not only protect unsecured creditors more effectively, but also balance the interests of creditors with those of the public at large. Without such an institution it is hard to see how we can ever take schools and hospitals out of direct state control. We are engaged in yet another round of reform which ducks the issue of what happens when these organisations fail. Failure is intrinsic to the market economy: but the legitimacy of capitalism depends in part on how it deals with the consequences of such failure. Recently, it hasn’t been doing too well."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
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<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://i.telegraph.co.uk/multimedia/archive/00885/duchess-of-york-460_885957c.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com1tag:blogger.com,1999:blog-6391476958230949091.post-66126872706893431742011-06-14T07:00:00.036+01:002011-06-14T07:00:06.950+01:00New Museum Acquisition: Thomas Davies, The Laws Relating to Bankrupts..., London, 1744<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-L1qxb1dOoqc/Te9SVLeO7II/AAAAAAAABm8/YBK7Hlwcnyw/s1600/daviesone.jpg" imageanchor="1" style="clear: right; cssfloat: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="320px" src="http://1.bp.blogspot.com/-L1qxb1dOoqc/Te9SVLeO7II/AAAAAAAABm8/YBK7Hlwcnyw/s320/daviesone.jpg" t8="true" width="240px" /></a></div><span style="font-family: Georgia, "Times New Roman", serif; font-size: x-small;">The <em><a href="http://law.kingston.ac.uk/research/centre-insolvency-law-policy/muir-hunter-museum">Muir Hunter Museum of Bankruptcy</a></em> has aquired another interesting item. The collection now contains Mr Thomas Davies' <em>"The laws relating to bankrupts, brought home to the present time : with several special cases, modern determinations, and precedents relating thereto, and directions for creditors and debtors : also a list of the fees in bankruptcy, and the method of proceeding therein",</em> printed in London by Henry Lintot MDCCXLIV (1744).</span><br />
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<span style="font-family: Georgia, "Times New Roman", serif; font-size: x-small;">The book (pictured) measures 8.5 x 13". The leather binding is in good condition with only slight wear and rubbing. Internally the text is very good, with only slight worming to the upper right corner of the last several leaves. There are two previous owner signatures, an undated Samual Sedgwick and what appears to be a 'Dan Jones', Lincoln's Inn, dated November 20th 1765. This is a rare work and scholars are welcome to use by appointment.</span>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-40967437211920463762011-06-13T07:44:00.018+01:002011-06-13T07:44:00.324+01:00Insolvent: some definitions<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-Mxi_m22DMPY/Te6ACweXXmI/AAAAAAAABm4/TexVKfw1QeA/s1600/library.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="312" src="http://3.bp.blogspot.com/-Mxi_m22DMPY/Te6ACweXXmI/AAAAAAAABm4/TexVKfw1QeA/s400/library.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Building on our last post on bankruptcy definitions I thought it might be useful to include some definitions of the term insolvent in this jurisdiction and elsewhere. </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><u><br />
</u></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><u>England and Scotland</u></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"></span></span></div><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><div style="text-align: justify;">"A person is deemed to be insolvent within the meaning of this Act if he has either ceased to pay his debts in the ordinary course of business, or he cannot pay his debts as they become due. (Sale of Goods Act 1979, s 61(4) (as amended by the Insolvency Act 1985, s 235, Sch 10, Part III, and the Bankruptcy (Scotland) Act 1985, s 75(2), Sch 8)</div><div style="text-align: justify;"><u><br />
</u></div><div style="text-align: justify;">"'I admit that a man is not insolvent, because he postpones the payment of a demand for a week or ten days, during which the creditor consents to wait, or renews a bill; and yet these are indications of a want of present power to fulfil his engagements. These, however, are cases to be decided by a jury upon the whole matter. My understanding of insolvency is a man's not being in a condition to pay 20s [now 100 pence] in the pound, in satisfaction of all demands.'" Teale v Younge (1825) M'Cle & Yo 497 at 506, per Garrow B</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">"The ordinary import of the word insolvency is an incapability of paying the party's just debts.'" Parker v Gossage (1835) 2 Cr M & R 617 at 620, per Parke B</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">"[By a marriage settlement real property was vested in trustees upon trust for the wife for life, and after her death to pay the rents to the husband, until he should be bankrupt or 'insolvent', with a gift over to the children.] 'The settlement here creates a series of vested estates, the interest of the children taking effect in remainder upon the bankruptcy or insolvency of their father. On his becoming bankrupt in the lifetime of his wife, his interest in remainder, unless it went over, would have passed to his assignees, and the intention of the gift over was to preserve the property to the children in the event in which it would otherwise pass to the assignees. Neither can there be any question that what took place was an insolvency within the meaning of the settlement. The word insolvent has no technical meaning in such cases, but simply means incapable of paying debts that are due…. It is impossible to say that there was not an insolvency in this case, although no doubt a mere request for time, or a compromise of disputed claims, would not amount to an insolvency.' Re Muggeridge's Trusts (1860) John 625 at 627, per Page Wood V-C</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">'I cannot help thinking it quite clear that the term “insolvent” means public insolvency; not necessarily the taking the benefit of, or being made liable to, the Insolvent Act, but being incapable to pay his debts in ordinary course; or, in other words, having “stopped payment”…. It may at least mean “not paying” as well as “being incapable of paying”.' R v Saddlers' Co (1863) 10 HL Cas 404 at 463, per Lord Wensleydale</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;">'There are decisions as to the meaning of the word “insolvent”. They all state that “insolvency” means commercial insolvency, that is to say, inability to pay debts as they become due.' London & Counties Assets Co Ltd v Brighton Grand Concert Hall & Picture Palace Ltd [1915] 2 KB 493 at 501, 503, per Buckley LJ</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><u>Australia</u></div><div style="text-align: justify;">'“Insolvent” is a word that has no technical meaning in the law of England; it simply means “unable to pay debts”. In this State [South Australia], in consequence of the laws for the relief of insolvent debtors using the term insolvent where in England the term “bankrupt” is used, the word has, in my opinion acquired, in addition to its primary meaning, as above, the technical meaning of subject to legal process under those laws…. So well established has this meaning become in popular usage in this State that if anyone were told that a certain individual—I am not speaking of companies, which are not subject to the Insolvent Acts—had “become insolvent”, he would, I believe, understand by that expression not that he was merely unable to pay his debts, but that he had become subject to the process of the Court of Insolvency.' Re Salom, Salom v Salom [1924] SASR 93 at 95, 97, per Murray CJ</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><u>Canada</u></div><div style="text-align: justify;">'The question … is, was the debtor “in insolvent circumstances” or “unable to pay his debts in full” when he executed the mortgage in question? The authorities shew that these two phrases denote the same financial condition…. Various tests of insolvency have been from time to time formulated and applied, but the one which has been received with most favour in this province is that given by Vice-Chancellor Spragge in Davidson v Douglas [(1868) 15 Gr 347 at 351]. He there says that in considering the question of the solvency or insolvency of a debtor the proper course is “to see and examine whether all his property, real and personal, be sufficient if presently realised for the payment of his debts, and in this view we must estimate his land, as well as his chattel property, not at what his neighbours or others may consider to be its value, but at what it would bring in the market at a forced sale; or at a sale when the seller cannot await his opportunities, but must sell”…. The Spragge test seems to me the proper one as applied at least to a non-trader.' Trotter v Pedlar [1921] 1 WWR 233 at 235–236, per Mathers CJKB</div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.ilovesweethearts.co.uk/blogJo/wp-content/uploads/2011/01/library.jpg</span></div></span>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-30077513243150721122011-06-10T07:29:00.010+01:002011-06-10T07:29:00.424+01:00Bankruptcy - some definitions<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-Pc3LQFn4NVc/Te59GmGMO6I/AAAAAAAABm0/ZIN-llSAtxc/s1600/2460028088_a0baeb592e.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="266" src="http://3.bp.blogspot.com/-Pc3LQFn4NVc/Te59GmGMO6I/AAAAAAAABm0/ZIN-llSAtxc/s400/2460028088_a0baeb592e.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">We have discussed the <a href="http://bankruptcyandinsolvency.blogspot.com/2009/07/hobs-what-is-in-word-derivation-of-term.html">historical derivation of the term bankruptcy before</a>. I thought it might be useful in this post to include some further definitions of the term. These examples are drawn from both primary and secondary sources in this jurisdiction and elsewhere. This post will be updated with further definitions as and when the shelves (pictured) bear fruit.</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><u>UK</u></span></span></div><br />
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</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"Bankruptcy is a proceeding by which the State takes possession of the property of a debtor by an officer appointed for the purpose, and such property is realised and, subject to certain priorities, distributed rateably amongst the persons to whom the debtor owes money or has incurred pecuniary liabilities." (2 Bl Com 472)</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">'"Bankrupt' includes any person whose estate is vested in a trustee or assignee under the law for the time being in force relating to bankruptcy." (Bills of Exchange Act 1882, s 2)</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"'Bankruptcy' includes liquidation by arrangement; also in relation to a corporation means the winding up thereof." (Law of Property Act 1925, s 205)</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">'That section [the Bankruptcy Act 1869, s 72 (repealed; see now the Insolvency Act 1986, s 363)] enacts that “Every Court having jurisdiction in bankruptcy under this Act shall have full power to decide all questions of priorities and all other questions whatsoever, whether of law or fact, arising in any case of bankruptcy coming within the cognizance of such Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice” under the provisions of the Act. It appears to me very clear that “bankruptcy” does in this section include “composition.” The word “bankruptcy” is a general term, and is used to include all the three modes of settling the debts of a debtor with his creditors which are included in the Act; and the words, “Every Court having jurisdiction in bankruptcy,” include, surely, every court having jurisdiction in a composition. In my opinion, therefore, bankruptcy does clearly include composition.'" Re Thorpe, ex p Hartel (1873) 8 Ch App 743 at 745, per Mellish LJ</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><u>Scotland</u></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"[By a codicil to a will a testator bequeathed a sum of money, upon trust to pay the income thereof to his son 'during his life, or! until he shall become bankrupt'.] 'He has become bankrupt according to the law of Scotland…. In default of evidence I shall assume that bankruptcy in Scotland is a bankruptcy within the meaning of the words “shall become a bankrupt”…. We all know what a bankruptcy means. It means shortly a cessio bonorum for the benefit of all the creditors of the person who makes that cesser, and unless it were proved to me that by the municipal law of a particular country there was some such unfairness or some such departure from what is sometimes called “natural law” that I ought not to regard it as a bankruptcy within our law, and within the meaning of this clause, I should certainly regard bankruptcy according to the law of any civilised country as a bankruptcy within the meaning of the instrument before me.'" Re James, Clutterbuck v James (1890) 62 LT 454 at 455, per Kekewich J</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><u>Canada</u></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"'Bankruptcy is a well understood procedure by which an insolvent debtor's property is coercively brought under a judicial administration in the interests primarily of the creditors. To this proceeding not only a personal stigma may attach but restrictions on freedom in future business activity may result. The relief to the debtor consists in the cancellation of debts which, otherwise, might effectually prevent him from rehabilitating himself economically and socially…. Insolvency, on the other hand, seems to be a broader term that contemplates measures of dealing with the property of debtors unable to pay their debts in other modes or arrangements as well. There is the composition and the voluntary assignment, devices which, in appropriate circumstances, may avoid technical bankruptcy without too great prejudice to creditors and hardships to debtors. These means of salvage from the ravages of misfortune are of the essence of insolvency legislation, and they are incorporated in the Bankruptcy Act."' Canadian Bankers Assocn and Dominion Mortgage & Investments Assocn v A-G of Saskatchewan [1956] SCR 31 at 46, SCC, per Rand J</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><u><br />
</u></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://farm3.static.flickr.com/2317/2460028088_a0baeb592e.jpg</span></span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-82646817482726305832011-06-09T07:52:00.000+01:002011-06-09T07:52:00.746+01:00Statutory Demands and set-aside applied: Mahon & Anor v FBN Bank (UK) Ltd [2011] EWHC 1432 (Ch) (06 June 2011)<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-x5dlZ16roJw/Te5ZjclAm1I/AAAAAAAABmw/i81A5jqnV5s/s1600/1354729_260ec9f0.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="300" src="http://3.bp.blogspot.com/-x5dlZ16roJw/Te5ZjclAm1I/AAAAAAAABmw/i81A5jqnV5s/s400/1354729_260ec9f0.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">HHJ Simon Barker QC has handed down his decision in </span></span><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><a href="http://www.blogger.com/goog_191934669">Mahon & Anor v FBN Bank (UK) Ltd</a></span></span></i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><a href="http://www.bailii.org/ew/cases/EWHC/Ch/2011/1432.html"> [2011] EWHC 1432 (Ch) (06 June 2011)</a>. The case concerns an interesting discussion of the courts ability to set-aside statutory demands. On set-aside the learned judge notes:</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"...</i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>IR 6.1 concerns the form and content of a statutory demand and IR 6.1(5) provides :</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>(5) If the creditor holds any security in respect of the debt, the full amount of the debt shall be specified, but—</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>(a) there shall in the demand be specified the nature of the security, and the value which the creditor puts upon it as at the date of the demand, and</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>(b) the amount of which payment is claimed by the demand shall be the full amount of the debt, less the amount specified as the value of the security.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>A set aside application is not a trial, and there is no jurisdiction to make binding findings of fact or a substantive determination of issues on the merits. This is emphasised by the language of IR 6.5(4) under which the discretion is permissive and the tests do not envisage a final determination. The court is engaged in a summary process requiring consideration and some evaluation of the available evidence, but not a conclusive or final determination.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Although the court may give directions under IR 6.5(3), there is no automatic requirement for disclosure; and, oral evidence would be unusual, except to the extent that litigants in person may be allowed the indulgence of supplementing their written evidence by oral statements during the hearing.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>As is implicit in IR 6.5(3), fresh evidence may be admitted up to and during the hearing. The exercise of this procedural discretion will be governed by the court's duty to comply with and further the overriding objective (the CPR being generally applicable to insolvency proceedings), and although an appeal, unconstrained by the Ladd v Marshall[2] criteria.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>IR6.5(4) confers a discretion on the court, which is, of course, to be exercised judicially, that is in accordance with established principles of law, having regard to the circumstances of the case, and also bearing in mind the CPR. Sub-rules (a), (b) and (c) address particular grounds for the exercise of the discretion. Subparagraph (d) provides a residual ground, expressed openly and without qualification (save that "other grounds" obviously means that (a), (b) and (c) as individual grounds are excluded from or fall outside (d)).</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>First instance decisions to the effect that subparagraph (d) is designed to deal with procedural flaws in a demand and inappropriate for consideration of substantive matters have been criticised by the Court of Appeal, Budge v A F Budge Contractors Ltd [1997] BPIR 366, in which extensive reference was made to the Court of Appeal decision in Re a Debtor [1989] 1 WLR 271.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>In Budge, Peter Gibson LJ, with whom Balcombe and Hutchison LJJ agreed, observed that it is "quite impossible to foresee all the circumstances which may arise and which may justify the proper application of that subparagraph. But … there is no point in setting aside a statutory demand for defects in the statutory demand which are not so substantial as to leave the debtor truly perplexed by its contents … [or … to require a creditor] to litigate his claim that he is owed money by the debtor, if it cannot be foreseen that there will be any ground on which the creditor will be denied his claim were the matter to be litigated".</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>In a sentence, and drawing on the judgment of Nicholls LJ, as he then was, in Re a Debtor [1989] 1 WLR 271, p.276, in addition to the above, the discretion under IR6.5(4)(d) is properly invoked and exercised in any case in which the court is satisfied that it would be unjust to allow the creditor to proceed to the next step, namely to present a bankruptcy petition.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Allegations of undue influence in the context of a guarantee to a bank given by a wife in respect of business lending to a husband or his company and where the wife raised a defence that the bank was on notice that her concurrence in the transaction had been procured by her husband's undue influence were the subject of appeals in eight cases considered by the House of Lords in 2001 and decided together under the lead name RBS v Etridge (No.2) [2001] UKHL 44.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>Where a wife is a guarantor of lending to her husband or a business, the first task is to ascertain whether the guidance in Etridge is applicable to the lender/bank. In the ordinary course, there is no presumption of undue influence. There is a degree of sensitivity to the facts. However, the test is set at a very low level so that it should be a straightforward matter to decide. The short answer is, "[q]uite simply, that a bank is put on inquiry whenever a wife offers to stand surety for her husband's debts"[3]. To which I would add, that this is all the more so where the wife is not known to the lender/bank and is volunteered as a surety by the husband...." </i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: </span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">http://s0.geograph.org.uk/geophotos/01/35/47/1354729_260ec9f0.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com1tag:blogger.com,1999:blog-6391476958230949091.post-68196450456813958592011-06-08T08:54:00.001+01:002011-06-08T08:54:00.463+01:00Insolvency items in the news: bankruptcy from legal fees, no win no fee and some alleged misconduct<div style="text-align: justify;"><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-0fTjcUNfw0k/Teyplfr68dI/AAAAAAAABmI/QnJDdLErNOU/s1600/Bcci_logo.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://4.bp.blogspot.com/-0fTjcUNfw0k/Teyplfr68dI/AAAAAAAABmI/QnJDdLErNOU/s1600/Bcci_logo.jpg" /></a></div><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">There are some interesting items in the news which have insolvency related themes. The </span></span><a href="http://www.telegraph.co.uk/news/uknews/law-and-order/8557116/Former-magistrate-cleared-of-rape-but-facing-bankruptcy.html"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Daily Telegraph is reporting</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> that a magistrate who was recently acquitted of serious sexual assault is now facing bankruptcy as a result of his legal costs. Elsewhere, the <a href="http://www.bbc.co.uk/news/business-13645691">BBC are reporting that bankruptcy costs are to rise</a>. The story notes: </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"</i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The rise in the cost of going bankrupt could discourage people with financial problems from seeking a solution, debt experts are warning.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The fee for petitioning for bankruptcy rose by<b> £75 to £525 at the start of the month. With the court fee added on, the total upfront cost is £700.</b></i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The Insolvency Service said the increase was needed to cover the cost of administration.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The charges, including court fees, have gone up by 37% since March last year.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Insolvency practitioner Mark Sands, from RSM Tenon, has warned that the increase would put extra pressure on individuals who were likely to be under stress or depressed.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"So many people flounder around and do not see a way out," he said.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"They are going to be put off exploring bankruptcy as a solution."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Squeeze</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The £525 charge is a deposit to cover the cost of managing a bankruptcy, which allows the bankrupt person to throw off the burden of debt and make a fresh start.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The Insolvency Service recovers a full administration fee of £1,715, less the deposit, from the bankrupt's assets or surplus income at a later stage. This sum is not being increased.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i><b>The Insolvency Service has seen its income squeezed because of the falling value of homes and other assets which are recovered from bankrupts.</b></i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Currently, the £1,715 fee is never fully paid in half of bankruptcies.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>There has been some criticism of the rising cost.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"It is unfair to families who are struggling but I felt that any money I had was going to be taken anyway," said a recent bankrupt who spoke to BBC News,</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Jon Elwes, from the Money Advice Trust, said: "This increase in the cost of going bankrupt is likely to swell the numbers of people falling through the net of the current insolvency regime.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"Our advisers at National Debtline speak to people everyday for whom bankruptcy would be the best solution to their debt problem, but for the fact they cannot afford the associated fees."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Lower cost</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>There is now a cheaper and easier alternative, the Debt Relief Order (DRO), which costs £90.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>“</i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>We have to strike a balance between giving bankrupts debt relief and a fresh start, and the need to provide some return to creditors”</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>...In the first quarter of this year there were 6,788 DROs, a 20% rise on the previous year.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>However, people can only ask for a DRO if their debts are less than £15,000 and savings and assets are less than £300.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"What if you have £16,000 of debt?", said Mark Sands of RSM Tenon.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"You are faced with that barrier of hundreds of pounds before you can opt for bankruptcy to resolve your difficulties."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Una Farrell, from the Consumer Credit Counselling Service, said: "It is a very steep rise. We already have to do a lot of work helping our clients to get the money together to pay the fees."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>But Mr Horne said the Insolvency Service was obliged by Parliament to break even, a task which had become increasingly difficult.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"It has always been our policy that if bankrupts can pay something towards their debts then they should," he said.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"We have to strike a balance between giving bankrupts debt relief and a fresh start, and the need to provide some return to creditors."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Elsewhere, <a href="http://www.guardian.co.uk/business/2011/jun/06/small-business-taxavoidance"><i>The Guardian</i></a> and <i><a href="http://www.accountancyage.com/aa/news/2076675/moj-exclude-insolvency-reforms">Accountancy Age</a></i> are both reporting on the no win no fee issues surrounding IPs and the recently mooted reforms to legal aid. The Guardian story notes:</span></span><br />
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<span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"But the move to restrict the use of conditional fee arrangements applies not just to personal injury cases but also to a range of other legal disputes, including insolvency situations. The plans have raised fears that insolvency practitioners may find it harder to pursue fraudulent company directors to recover cash for creditors. HMRC would be the biggest loser, with its losses due to insolvencies and fraud running into billions of pounds every year."</i></span></span><br />
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<i><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;">"Frances Coulson, president of R3,said: "Under these proposals it will be harder for insolvency practitioners to recoup money from dodgy directors, so creditors such as the business community and HMRC could be left with nothing. It is essential that insolvency is exempt from these proposals so that businesses and HMRC are not left out of pocket and wrongdoing is not seen to be excused. Every penny left in the pocket of a director in a carousel fraud case is likely to fund another fraud."</span></span></i><br />
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<span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Finally, a sometime BCCI and Madoff estate <a href="http://www.thelawyer.com/hoglove-calls-in-police-as-grierson-repays-%C2%A31m-of-expenses/1008141.article">legal advisor</a> is also under investigation <a href="http://www.ft.com/cms/s/0/f226ea8e-8e07-11e0-bee5-00144feab49a.html">for alleged expenses irregularities</a>. </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: BCCI</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-5954806555585880212011-06-07T07:47:00.004+01:002011-06-07T10:28:13.040+01:00The Marquess of Reading and Debt<div class="MsoNormal" style="text-align: center;"><br />
</div><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-lNuxNtBfwls/Te1nScZiNVI/AAAAAAAABmk/bsFvOlcsBZU/s1600/wp59c62d6b_1b.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="310" src="http://3.bp.blogspot.com/-lNuxNtBfwls/Te1nScZiNVI/AAAAAAAABmk/bsFvOlcsBZU/s320/wp59c62d6b_1b.jpg" width="320" /></a></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span lang="EN-US" style="color: #001fe8;"><a href="http://www.lawgazette.co.uk/news/the-charmed-life-rufus-isaacs"><span style="color: #001fe8; text-decoration: none;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Sir Rufus Isaacs</span></span></span></a></span><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">, the Most Honourable The Marquess of Reading, GCB, GCSI, GCIE, GCVO, PC, KC (10 October 1860 – 30 December 1935 - pictured) is a truly remearkable figure. We will leave to one side the fact that he used to bleed from his eyes through over work, and instead, concentrate on his contribution to the insolvency jurisdiction. First, we will undertake a brief biographical overview of the Lord Reading's life. Born in London, the son of a fruit merchant, Lord Reading attended University College School. He did not go to University, instead spending time in the the family fruit business and as a ship's boy. He became a member of the London Stock Exchange before being called to the Bar as a member of Middle Temple in 1887. The Lord Reading went on to take silk, become a Member of Parliament, become Solicitor-General, Attorney-General, Lord Chief Justice (1913-1921), Ambassador to America, and Viceroy of India (1921). The Reading Marquessate is the highest ever rank in the English peerage to be awarded to a <a href="http://bankruptcyandinsolvency.blogspot.com/2011/02/sir-george-jessell.html">Jew</a>. The Lord Reading was sometimes referred to as the "Hebrew Earl."</span></span></span></div><div class="MsoNormal" style="text-align: center;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">We can now turn to a consideration of his contribution to the insolvency jurisdiction. </span></span><a href="http://hansard.millbanksystems.com/acts/courts-emergency-powers-act-1914"><span style="color: #001fe8; text-decoration: none;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">The Courts (Emergency Powers) Act 1914</span></span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> was the brainchild of the Marquess. The statute allowed the court to exercise it's discretion so as to allow a debtor more time to pay their creditors in </span></span><a href="http://www.jstor.org/pss/752495"><span style="color: #001fe8; text-decoration: none;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">the event of the war causing delay</span></span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> to payment. The Marquess had himself suffered some liquidity problems whilst at the London Stock Exchange. These may have been some inspiration for his war time debt amelioration activities due to this experience. Specifically, the statute provided a principle, "to place the remedies of creditors, whether judicial or by way of self-help, in the discretion of the Court, which can refuse the creditor to exercise his remedies of the debtor is unable to satisfy the debt of obligation as a result of the war."</span></span></span><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><o:p></o:p></span></span></span></div><div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-6Mc1r-bQmDs/Te1nbvqJS6I/AAAAAAAABmo/H6HcDH5-NUI/s1600/normal_08263-Sir-Rufus-Isaacs.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" src="http://1.bp.blogspot.com/-6Mc1r-bQmDs/Te1nbvqJS6I/AAAAAAAABmo/H6HcDH5-NUI/s320/normal_08263-Sir-Rufus-Isaacs.jpg" width="230" /></a></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">As Lord Chief Justice, the Lord Reading has only one reported case to his name. </span></span></span><span lang="EN-US"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Savill v Dalton </span></span></i></span><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">[1915] 3 K.B. 174 concerned the issue of whether an action is maintainable upon an order for the payment of money made by a county court in the exercise of its bankruptcy jurisdiction.</span></span></span><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><o:p></o:p></span></span></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Four years after his death a similar statue was enacted to deal with World War II debt issues, namely, t</span></span><a href="http://www.jstor.org/pss/1089929"><span style="color: #001fe8; text-decoration: none;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">he Courts (Emergency Powers) Act 1939.</span></span></span></a></span><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><o:p></o:p></span></span></span></div><div class="MsoNormal" style="mso-layout-grid-align: none; mso-pagination: none; text-align: justify; text-autospace: none;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">The 2nd Marquess, Colonel Sir Gerald Isaacs QC, was also a barrister, silk, sometime Treasurer and Bencher of Middle Temple, and Member of Parliament. He won a Military Cross in World War I. </span></span><a href="http://www.npg.org.uk/collections/search/portrait/mw139783/The-Marquess-and-Marchioness-of-Reading-with-their-son?LinkID=mp91614&role=sit&rNo=0"><span style="color: #001fe8; text-decoration: none;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">His son, the 3rd Marquess, Michael Alfred,</span></span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> also won the Military Cross.</span></span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-46134319449395908492011-06-06T07:17:00.002+01:002011-06-06T10:42:40.268+01:00Olympic Tickets: How I beat the System (and Boris!)<div style="text-align: justify;"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-N6mayrx910Q/TeyhA5dVzHI/AAAAAAAABl4/tzHd7oLFmhs/s1600/olympic+rings2.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="213" src="http://3.bp.blogspot.com/-N6mayrx910Q/TeyhA5dVzHI/AAAAAAAABl4/tzHd7oLFmhs/s320/olympic+rings2.JPG" width="320" /></a></div><span class="Apple-style-span" style="font-size: x-small;">When John asked me to blog for his site, I am sure that he didn't think I would get him this much coverage!</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">This note is just to set out the approach I took to succeed in getting Olympic Tickets where so many appear to have failed. I also want to make it clear what risk I thought I was taking. I am by no means a mathematical or statistical expert and without any prior information on the odds of winning tickets I am not sure there could have been any accuracy in working out the odds before the recent ballot process.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">If we take simple binomial theory, you can calculate the odds on certain events happening with a fixed number of attempts with fixed odds each time. In the case of a coin toss, the chances of it being heads on one toss is Evens, on two tosses the chances of getting at least one head is higher and the chances of them both being heads is lower. Add a third coin toss and the chances of getting at least one head goes up and the chances of all three tosses being heads becomes much greater. The Olympic ballot permitted bids for up to 20 events so if the odds of succeeding on each were the same as a coin toss then the chances of getting more than one event would be all but certain, with a guesstimate that you would expect about 10 events.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">Of course I had to assume that the odds for each of the popular events would be more than evens. Even at 2:1 the odds change dramatically. At say 10:1 the odds of getting one or two tickets becomes quite low and all of them quite impossible.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">But it is not that simple. You could bid for different tickets in a range for each event. In that case each event becomes its own binomial experiment. If there were say 10 tiers of ticket and the odds were 10:1 on each, you might expect to get at least one of each so overall you might succeed in getting one for each event applied for. If there happened to be a single tier of price for each event which was not oversubscribed then you would be certain of getting that ticket or better. Assuming that the ballot was held on each event on a reducing price basis starting with the most expensive tickets, you would also have a tendency to be successful for more than the cheapest. In fact, you might assume that most people would apply for the cheaper tickets so there would be much less competition for the top tiers. Against this you might assume that there were less of these which might even things up but LOCOG gave no information on this.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">You can see that the combinations become mind-boggling, and without knowing whether the odds are 10:1 or 100:1 you cannot confidently predict the outcome. I did however make a working assumption that all tiers would be oversubscribed and therefore the general binomial principles would apply in that the chances of getting some increase with the amount of bids and the chances of getting them all reduce.</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">Having decided on my 20 choices it was of course important that I would be happy if I only received one of them. In my case the headline figure was £35,918 but that is the sum of the top tickets applied for in every tier. If I succeeded in half of them at the mid-price tier on average, you would expect the amount to be £9,000 if the prices were reducing evenly (but they are not. They are not even evenly priced in comparison to each other). Odds are all very well but in the case of the Olympics the top price of some of the tickets were huge. The Opening Ceremony costs run from £2012 to £20.12 and the maximum you could bid for was 4. The risk range on this event alone was therefore £8,048 to 80.48. If you happen to get the top rate then this makes the total sum potentially much larger and throw out any broad assumptions you might make. </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">This takes me on to the thorny issue of the credit limit provisions. The bidding rules seemed clear. By taking part in the application process you were not contracting to buy the tickets. If the funds were not in place at the time requested then the application would be rejected. This was very important for me as I could not be put in a position where the application left me financially embarrassed. What this provision did mean was that you could add an element of capping to the bid process. If you get your binomial-based guess completely wrong then your risk was limited to the amount of your bank balance or credit limit. It would be unfortunate if your application produced a request for an amount £10 over your limit but it did cap your risk. The existence of this provision led me to conclude that many people would bid beyond their credit limit and that all events would be greatly over-subscribed. It seems I was wrong. I have heard no stories of limits being exceeded except in my case, and I bid what appears to have been an exceptional amount! No doubt my error on this point alone meant that the chances of succeeding in more than one event was higher than I thought. </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">In my case I received an email saying that an attempt had been made to take funds and that this had been rejected. The polite email suggested that a second attempt would be made in a few days to give me a chance to put things right. The consequences of a second rejection was that they would not contact me again and I would not receive my allocation. No fuss and no financial penalty. The second chance was not in the bidding terms & conditions but the consequences of rejection were. I contacted by credit card company who confirmed the amount rejected. I then asked for an increase in my limit and explained the reasons for it and this was granted. </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">This was an unexpected twist and probably rendered much of the previous calculations moot. I had a simple and well-informed (at least in part) choice. I could choose to pay a large fixed sum for the certainty of some tickets from the 20 events I selected or choose to have none at all. In this I was more fortunate than most, including Boris. If I could meet the initial cost and wait, I could have some choice in how to use, sell or return some or all of the tickets. That comes at a price, but it is better than being powerless in a blind ballot. </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">As I write I wait to hear what my £11k successful bid actually amounts to. On the basis that I have set out above it is much more likely statistically that I have succeeded on one large event and one or two smaller ones than the sum of a lot of small events only. Hopefully in any case, my relatives and friends will recognise the value in getting THEIR bids in to me early, particularly before my credit card bill is due. Act now to save disappointment!!!! </span><br />
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<span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.olympics-accommodation-finder.com/files/olympic%20rings2.JPG</span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-45635569022114577892011-06-03T07:02:00.014+01:002011-06-06T11:07:03.290+01:00New BIS report: Credit, debt and financial difficulty in Britain, 2009/10. A report using data from the YouGov DebtTrack survey<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-nyLGM2DAnR8/TeymfG-4diI/AAAAAAAABmA/Sm2ug0fBjkM/s1600/bis-headerLogo.ashx.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://2.bp.blogspot.com/-nyLGM2DAnR8/TeymfG-4diI/AAAAAAAABmA/Sm2ug0fBjkM/s1600/bis-headerLogo.ashx.jpeg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><a href="http://www.bis.gov.uk/">BIS </a>(pictured) have published a new report entitled </span></span><i><a href="http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/c/11-963-credit-debt-in-britain-2009-10"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"Credit, debt and financial difficulty in Britain, 2009/10. A report using data from the YouGov DebtTrack survey."</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> </span></span></i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">(URN 11/963). The report uses data from the YouGov DebtTrack survey, a series of online surveys carried out between November 2009 and October 2010, to explore credit use and the extent of consumer indebtedness in Britain. The report notes that: "Overall, the analysis suggests a decrease in the proportion of households using unsecured credit since 2008/9, but an increase in the level of debt, both in absolute terms and as a proportion of household income. Evidence indicates that the incidence of financial difficulty may have declined during 2009/10; although the average proportion of households in structural arrears on payments remained unchanged compared with 2008/9, there has been a decrease in this indicator during 2009/10, as well as more subjective measures of financial stress."</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: BIS.</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-28437764783971917352011-06-02T07:07:00.001+01:002011-06-06T11:13:35.929+01:00Evening Standard Features Bankruptcy Blogger<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-iaVC4nE2aJA/Teyn7eeYkdI/AAAAAAAABmE/U6FPX555Ayk/s1600/olympic+rings2.JPG" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em; text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><img border="0" height="213" src="http://2.bp.blogspot.com/-iaVC4nE2aJA/Teyn7eeYkdI/AAAAAAAABmE/U6FPX555Ayk/s320/olympic+rings2.JPG" width="320" /></span></span></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Stephen's <a href="http://bankruptcyandinsolvency.blogspot.com/2011/05/ips-and-olympic-tickets-mr-hunt-on-bbc.html">Olympic ticket activities</a> have been </span></span><a href="http://www.thisislondon.co.uk/standard/article-23955552-insolvency-expert-gets-pound-11000-worth-of-olympic-tickets-he-couldnt-afford.do"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">picked up by the Evening Standard</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">. The story notes: </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"A man who discovered he had secured Olympic tickets costing £11,000 told today how he decided to keep them all - after crunch talks with his wife.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Stephen Hunt, a Bloomsbury insolvency practitioner, said there was initially not enough money in his account to cover the payment and he was forced to make the "horrible choice" between increasing his credit limit or losing the tickets.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">When he applied for £36,000 worth he expected to get hardly any but now hopes the huge payment will mean a seat at one of the "big three" events - the opening and closing ceremonies or the men's 100 metres final.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Mr Hunt, 42, a father-of-three and West Ham fan from Hertfordshire, said: "I checked my card and there was no debit and then I received a helpful email from the ticket agency saying we've tried to take money, it's been refused but we'll give you a second chance.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"We agreed to go for it. We contacted our bank and the bank agreed to increase. It's about double what I was hoping for."</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Speaking to the BBC, Mr Hunt, who specialises in fraud investigation and company liquidation, added: "I'd rather scrimp and save for a bit extra then be disappointed."</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">At least 250,000 people are thought to have lost out after last night's midnight cut-off, who the organisers said would be contacted through email. They include the Mayor of London, Boris Johnson, who said he was "cheesed off" after checking his account this morning to see he had lost out in the online ballot.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">...</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Families will have to wait for up to another three weeks to discover which 2012 events they will see.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Games organiser Locog reported 20 million applications from 1.8 million people bidding for 6.6 million public tickets.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">There were more than one million bids to see the opening ceremony and men's 100 metres final.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Those who failed to secure tickets must join the scramble for any remaining tickets on a first-come, first-served tickets basis.</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">These are likely to include unsold seats at less popular events."</span></span></i></div><div style="text-align: justify;"><br />
</div><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: The Olympic Movement. </span>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-11208440334159677512011-06-01T07:40:00.017+01:002011-06-06T11:48:52.484+01:00Publications: Two Insurance Insolvency documents published.<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-vNbo601_f6s/TeyvxR2Y81I/AAAAAAAABmM/fPCQP-2Aqds/s1600/The-Law-Society-006.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="192" src="http://1.bp.blogspot.com/-vNbo601_f6s/TeyvxR2Y81I/AAAAAAAABmM/fPCQP-2Aqds/s320/The-Law-Society-006.jpg" width="320" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">The Law Society (pictured) has published a practice note on the </span></span><i><a href="http://www.lawsociety.org.uk/productsandservices/practicenotes/insolventpii/4968.article"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Insolvency of a Qualifying Insurer</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">. </span></span></i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">The document outlines what should be done in the event of the insolvency of a solicitor's insurer. In a related 'insurance field' development the <a href="http://www.iaisweb.org/__temp/Issues_paper_on_resolution_of_cross-border_insurance_legal_entities_and_groups.pdf">International Association of Insurance Supervisors has published a document</a> outlining guidance on ICP 16 of it's remit, namely, "The legal and regulatory framework defines a range of options for the orderly exit of insurers from the marketplace. <b>It defines insolvency and establishes the criteria and procedure for dealing with insolvency.</b> In the event of winding-up proceedings, the legal framework gives priority to the protection of policyholders”.</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Picture Credit: http://static.guim.co.uk/sys-images/Guardian/About/General/2010/9/14/1284447623196/The-Law-Society-006.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-35933835434722841432011-05-30T07:44:00.012+01:002011-06-07T17:48:52.055+01:00New insolvency SI: The Investment Bank Special Administration (England and Wales) Rules 2011<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-bp7VbP-G0sY/Te5WQlyqVqI/AAAAAAAABms/PvF2667fK3A/s1600/parliament_000.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="250" src="http://4.bp.blogspot.com/-bp7VbP-G0sY/Te5WQlyqVqI/AAAAAAAABms/PvF2667fK3A/s400/parliament_000.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;">The <i><a href="http://www.blogger.com/goog_1468995746">Investment Bank Special Administration (England and </a></i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i><a href="http://www.legislation.gov.uk/uksi/2011/1301/pdfs/uksi_20111301_en.pdf">Wales) Rules 2011</a></i> have been published. </span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">These Rules set out the procedure for the Investment Bank Special Administration process under the Investment Bank Special Administration Regulations 2011(a) (“the Regulations”). The main features of Investment Bank Special Administration are that:</span></div><br />
<div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">(a) the investment bank enters the procedure by court order;</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">(b) the order appoints an administrator;</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">(c) the administrator is to pursue the special administration objectives in accordance with the statement of proposals approved by the meeting of creditors and clients and, in certain circumstances, the FSA; and</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">(d) in other respects the procedure is similar to administration under Schedule B1 of the </span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">Insolvency Act 1986(b).</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Where the investment bank is also a deposit-taking bank, the Rules also apply in relation to the Special Administration (Bank Insolvency) and Special Administration (Bank Administration) processes under Schedules 1 and 2 of the Regulations.</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.editorsweblog.org/parliament_000.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-90380516607514014612011-05-27T07:29:00.014+01:002011-06-06T10:39:42.326+01:00Four time bankrupt - is regime tough enough?<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-HQpoqTLIOCM/TeygHvF2f-I/AAAAAAAABl0/H7RMUjApnlQ/s1600/Insolpcwithweb.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://4.bp.blogspot.com/-HQpoqTLIOCM/TeygHvF2f-I/AAAAAAAABl0/H7RMUjApnlQ/s1600/Insolpcwithweb.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">The <a href="http://www.insolvency.gov.uk/">Insolvency Service (IS)</a> have published an interesting press release which details the activities of a debtor who has been declared bankrupt four times. This does raise the question of whether the regime is tough enough, i.e. should more serious consequences have flowed from the third bankruptcy? The creditors of that bankruptcy and the fourth bankruptcy might certainly think so. Here are the details from the story: </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>"A four-time bankrupt, Darran Anthony Matthews, was last week sentenced to 24 weeks imprisonment by Southampton Magistrates’ Court following an investigation and prosecution by the Insolvency Service and the Department for Business, Innovation and Skills.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Matthews, a farmer of Sherbourne in Dorset, who had already had his discharge from bankruptcy suspended indefinitely, was found guilty on four counts of obtaining credit without disclosing his bankrupt status.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>In spite of a bankruptcy order against him in 2009, Mr Matthews obtained credit of almost £12,500 from four creditors without letting them know that he was a bankrupt, as he was required to do. The further debt incurred by Mr Matthews was in addition to the deficiency of nearly £22,500 in his bankruptcy. Mr Matthews has failed to pay any of these creditors.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>In court, Mr Matthews pleaded guilty to four charges of obtaining credit without disclosing relevant information, contrary to s.360 of the Insolvency Act 1986. He was given a six-month sentence for each charge. The sentences are to run concurrently (i.e. at the same time).</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><b>Since he had been made bankrupt on three occasions prior to his latest bankruptcy,</b> <b>Mr Matthews must have been aware of the restrictions applicable to him as a bankrupt.</b> In addition, these restrictions were reiterated to him by the Official Receiver in July 2009, prior to the suspension of his discharge from bankruptcy.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Commenting on the case Stephen Speed, Chief Executive of The Insolvency Service said:</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>“People struggling with debt who want to benefit from the debt relief arrangements offered by the insolvency regime must also be prepared to abide by the restrictions that come with that relief. Those who flout the terms of their bankruptcy orders must be prepared to face the consequences of such a decision, as Mr Matthews has found to his cost”.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Commenting on the case, Liam Mannall, an investigator with the Department for Business, Innovation and Skills said:</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>“Mr Matthews’ sentence sends a clear message to bankrupts who fail to keep to the terms of their bankruptcy order. We can and will investigate bankrupts, and where appropriate, take action when we find evidence of them deliberately acting to the determent of their creditors”.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Mr Matthews’ discharge from bankruptcy remains suspended indefinitely."</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: Insolvency Service, 2011.</span><span class="Apple-style-span" style="font-size: x-small;"> </span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-70351651915587541562011-05-26T07:19:00.029+01:002011-05-26T07:19:00.538+01:00Insolvency Items in the News - Gazza's IVA and IVA advice<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-H5vlxMuHxkU/Td1YzBl9XGI/AAAAAAAABlw/MJQFgPz_yAA/s1600/Gazzacry_350x420_755611a.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="320" src="http://4.bp.blogspot.com/-H5vlxMuHxkU/Td1YzBl9XGI/AAAAAAAABlw/MJQFgPz_yAA/s320/Gazzacry_350x420_755611a.jpg" width="266" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">There are a couple of interesting insolvency items in the news. First, Mr Paul Gascoigne's bankruptcy issues seem to be behind him. This will come as a relief and there should be no more debt upset for him (pictured). The <a href="http://www.bbc.co.uk/news/uk-england-tyne-13543694">BBC are reporting</a> that a bankruptcy petition against the 43 year old former footballer has been dismissed in the High Court in London. He apparently owed more than £30,000 to HMRC. Gazza is coming to a composition with his creditors using an IVA. As the BBC note, "...</span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">the court heard that a proposal had been put forward by Gascoigne which would allow him to pay off the full debt to HMRC within a structured time scale. </span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">District Judge Clarke, sitting at the Bankruptcy Court in London on Wednesday, heard that Gascoigne's "individual voluntary arrangement" had been approved on 13 May at a meeting of creditors."</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;">Elsewhere, IVA advice firm <a href="http://www.fairpoint.co.uk/">Fairpoint</a> has issued a profit warning according to <a href="http://www.accountancyage.com/aa/news/2073288/personal-insolvency-business-fairpoint-issues-profit-warning">Accountancy Age</a>. It might be fair to point out that Gazza's IVA has not been organised by the firm!</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://img.thesun.co.uk/multimedia/archive/00755/Gazzacry_350x420_755611a.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-56297219755444505602011-05-25T07:03:00.028+01:002011-05-25T07:03:00.188+01:00section 212 of the Insolvency Act 1986 considered - Re Mumtaz Properties Ltd [2011] EWCA Civ 610 (24 May 2011)<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-MXQJtMrfmqk/TduRKUaYaCI/AAAAAAAABls/XCK3UdNE4j8/s1600/article-0-0037D5E600000258-866_233x319.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://1.bp.blogspot.com/-MXQJtMrfmqk/TduRKUaYaCI/AAAAAAAABls/XCK3UdNE4j8/s1600/article-0-0037D5E600000258-866_233x319.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">Lady Justice Arden (pictured) has handed down the Court of Appeal's judgment in <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2011/610.html"><i>Re Mumtaz Properties Ltd</i> [2011] EWCA Civ 610 (24 May 2011)</a>. The case concerns, <i>inter alia</i>, section 212 of the Insolvency Act 1986 (IA86). At first instance various directors of the company were found liable to repay the amount of the directors' loan accounts and compensation for misfeasance and breach of fiduciary duty. In the appeal judgment Aden, LJ considers; what constitutes a</span><span class="Apple-style-span" style="font-size: x-small;"> <i>de facto</i> director;</span><span class="Apple-style-span" style="font-size: x-small;"> set off; and two questions relating to the amount of contributions by certain directors. The learned judge also refers to the recent judgment of the Supreme Court in <a href="http://www.bailii.org/uk/cases/UKSC/2010/51.html">Holland</a>. </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://i.dailymail.co.uk/i/pix/2009/07/09/article-0-0037D5E600000258-866_233x319.jpg</span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-87846975487123751632011-05-24T07:22:00.023+01:002011-05-24T07:22:00.125+01:00s.239 of the Insolvency Act 1986 - Green (Liquidator of Stealth Construction Ltd) v Ireland [2011] EWHC 1305 (Ch) (20 May 2011)<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-EMjVafwNAf4/TdrRB07ISYI/AAAAAAAABlo/X4t_vzGd0ng/s1600/w100_3_i003i.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="237" src="http://4.bp.blogspot.com/-EMjVafwNAf4/TdrRB07ISYI/AAAAAAAABlo/X4t_vzGd0ng/s400/w100_3_i003i.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Mr Justice David Richards has handed down his judgment in <a href="http://www.bailii.org/ew/cases/EWHC/Ch/2011/1305.html"><i>Green (Liquidator of Stealth Construction Ltd) v Ireland</i> [2011] EWHC 1305 (Ch) (20 May 2011)</a>. The case concerns a purported preference pursuant to section 239 of the Insolvency Act 1986 (IA86). In relation to the desire test the learned judge notes: </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"As </i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>I earlier mentioned, it is the decision to give a preference, rather than the giving of the preference pursuant to that decision, which must be influenced by the desire to produce the effect set out in s.239(4) (b). For these purposes, therefore, the relevant time is the date of the decision, not the date of giving the preference.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>In <b>Re MC Bacon Ltd [1990] BCC 78</b>, the company reached the limit of its overdraft facility on 14 April 1987. It was loss-making and had lost a major customer, and the directors were planning to retire. The bank was insisting that a debenture be granted if it was to continue to provide facilities to the company. Discussions took place during the second half of April and the first half of May. The company executed a debenture towards the end of May. In considering the time at which the company must be influenced by the desire to put the other party in a better position, Millet J said at p.88:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"It was also submitted that the relevant time was the time when the debenture was created. That cannot be right. The relevant time was the time when the decision to grant it was made. In the present case that is not known with certainty. It was probably some time between 15 April and 20 May, although as early as 3 April Mr Glover and Mr Creal had resigned themselves to its inevitability. But it does not matter. If the requisite desire was operating at all, it was operating throughout."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>In Re Fairway Magazines Ltd [1992] BCC 924, a director agreed to provide funding to the company under the terms of a written loan agreement dated 21 August 1990, which provided for the grant of a debenture to secure the loans. Advances were made under the agreement and on 27 September 1990 the debenture was executed. It was signed by the lender on the same date as the loan agreement and the only reason for the delay in execution by the company was that the director who was to sign on behalf of the company was slow in doing so and returning it to the company's solicitors. Mummery J referred to Re MC Bacon Ltd as relevant for a number of purposes, including:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"Finally, the relevant time to consider is the time when the decision is made to grant the debenture, not the date of the execution of the debenture itself. In this case the relevant date is the date of the agreement on 21 August 1990."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>By contrast, in Wills v Corfe Joinery Ltd [1997] BCC 511, where two directors lent sums to a company in January 1994 on terms that they would not be called in for a year and were repaid by the company in February 1995, Lloyd J held that the decision to repay was made not when the loans were made on the agreed terms as to the date of repayment, but when the cheques for repayment were signed in February 1995. He said at p.513:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"However, I do not accept that January 1994 was the date by reference to which it is appropriate to consider whether, in giving the preference that undoubtedly was given, the company was influenced by the relevant desire. It seems to me that all that happened in January 1994 at most was that the loans became repayable in January 1995. A lot of debts were payable by the company in January 1995 and a lot of them were not paid. The fact that the directors' loan accounts were repayable in January 1995 does not lead to the conclusion that there was not a relevant decision to give the preference by actually paying those debts. It seems to me that the relevant decision to make the payments was and could only have been made at the time, or immediately before the time, when the cheques were drawn, that is to say, on 2 February and 6 February 1995. Even if, as I am prepared to accept for present purposes, what passed in January 1994 meant that there was an obligation on the company to pay the debt in January 1995, it was necessary for the board to review at that time whether to honour that obligation. If the board had known that the company was insolvent or would be made insolvent by honouring that obligation, it could not have made the payment."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Most preferences involve the payment of some debts in preference to others. All debts stem from an enforceable obligation to make the payment. If the decision to incur the debt, rather than the later decision to pay it, was the relevant time at which the company's desire was to be judged, the payment of debts would rarely constitute a preference under s.239.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>It might be argued that there is a distinction between the payment of debts on the one hand and other obligations, such as an obligation to grant a security, on the other. I do not see why in principle that should be so. Even if there had been an enforceable obligation incurred in October 2007 to grant a charge, there would in ordinary circumstances after a delay of 12 or so months be a further decision to comply with the obligation, just as in the case of a debt there would be a further decision to comply with the obligation to pay the debt. Precisely the same considerations would apply in the former case as Lloyd J said would apply in the latter:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>"it was necessary for the board to review at the time whether to honour that obligation. If the company had known that the company was insolvent or would be made insolvent by honouring that obligation, it could not have made the payment."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The position is, of course, all the stronger in a case such as the present where the company was not subject to any enforceable obligation to grant the charge. It would be a voluntary act and, after an interval of 12 months or more, would necessarily involve a decision to proceed with the grant of the charge.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>In my judgment, the question of when the decision is made is a question of fact to be determined in the particular circumstances of each case. An existing contractual obligation is neither necessary nor of itself sufficient. There was no prior obligation to grant a debenture in Re M C Bacon Ltd but on the facts of the case Millett J found that the decision to do so had been made at some time in the period of negotiations up to 20 May 1987. In Re Fairway Magazines Ltd, where the delay in execution of the debenture was simply because the director had been slow to sign for the company, the company's decision was found to have been when the loan agreement was made, and the lender signed the debenture, a few weeks earlier. By contrast, on the very different facts of Wills v Corfe Jointer Ltd, the decision to repay the loans was made long after the loans were made and the obligation to repay them was incurred.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Because Miss Gillis and Mr Costa did not give evidence, I do not know what discussions or decisions in fact took place in October to December 2008, except that the instructions to prepare the charge were given to Mr Saunders in that period. That itself is some evidence that the decision was then taken to grant the charge. In circumstances where there has been a delay of over a year and where the company was under no obligation to grant the charge, and where even then the charge was granted only because Mrs Ireland raised the issue, the reasonable inference is that Miss Gillis, whether on her own or with Mr Costa, decided that the company should proceed to grant the charge to Mrs Ireland.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The time for judging whether the company was influenced by a desire to improve the position of Mrs Ireland is therefore about November 2008. This is entirely an issue of the thought processes of the directors of the company. They knew that the company was unable to pay its debts, including the debt to Mrs Ireland, as they fell due. Objectively it would seem likely that Miss Gillis wished to improve the position of her sister but in any event, without calling Miss Gillis and/or Mr Costa to give evidence, Mrs Ireland is unable to rebut the presumption created by s.239(6)."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://openlearn.open.ac.uk/file.php/2987/!via/oucontent/course/327/w100_3_i003i.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-65192659182036655022011-05-24T07:11:00.022+01:002011-05-24T07:11:00.426+01:00Bankrupt Logistics<div class="separator" style="clear: both; text-align: center;"><a href="http://1.bp.blogspot.com/-Is55pXZi1iw/TdrOPVqxmgI/AAAAAAAABlk/eo2M1noYFjo/s1600/eddie-stobart.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="266" src="http://1.bp.blogspot.com/-Is55pXZi1iw/TdrOPVqxmgI/AAAAAAAABlk/eo2M1noYFjo/s400/eddie-stobart.jpg" width="400" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Our </span></span><a href="http://bankruptcyandinsolvency.blogspot.com/2009/04/famous-bankrupts-throughout-history-at.html"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">list of famous bankrupts</span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> can now be augmented with the name of Stobbart. The <i><a href="http://www.newsandstar.co.uk/news/ex-haulage-boss-edward-stobart-died-bankrupt-and-in-debt-1.840031?referrerPath=news">News & Star</a></i> is reporting that Mr Edward Stobbart is bankrupt. His family name is synonymous with the famous trucks which are a daily feature on our roads (pictured). The article continues: </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><i>"T</i></span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>he trucking legend who transformed the Cumbrian haulage firm Eddie Stobart into a household name was bankrupt when he died.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>Legal papers which have just been released show Edward Stobart, who ran the firm for 30 years, had</i><b><i> personal debts of £220,000 at the time of his death.</i></b></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>He died in hospital aged 56 in March after suffering a heart attack.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>It has now emerged that Mr Stobart petitioned for his own bankruptcy at </i><b><i>Warwick County Court</i></b><i> last July. RSM Tenon, the insolvency firm dealing with the case, said today: “Known creditors have claims amounting to around £220,000. No material assets have yet been recovered. The investigations are ongoing.”</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The business was started by Edward’s father Eddie in the 1950s as part of his agricultural business in Cumbria. But it was Edward rather than his father – known as Eddie to distinguish the two – who built up the business, taking over the fleet when he was just 21 in 1976..."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://4.bp.blogspot.com/-jJOQJbP30TI/TZR-zaBkM1I/AAAAAAAADH8/K1fHX6AFFoo/s1600/eddie-stobart.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com1tag:blogger.com,1999:blog-6391476958230949091.post-61269504364178728012011-05-23T07:15:00.002+01:002011-05-23T23:50:29.652+01:00Bankruptcy and the law in the Forsyte Saga<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/_YrPhWhp-AW0/TTQZQf5vkgI/AAAAAAAABc0/RulsIZgKIto/s1600/2001-series-soames-hat.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://2.bp.blogspot.com/_YrPhWhp-AW0/TTQZQf5vkgI/AAAAAAAABc0/RulsIZgKIto/s1600/2001-series-soames-hat.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">Mr John Galsworthy OM's <a href="http://nobelprize.org/nobel_prizes/literature/laureates/1932/">1932 Nobel prize winning</a> <i>Forsyte Saga</i> is a well-known and much loved exposition of upper middle class British family life. Law runs through the series of books, perhaps most obviously demonstrated by the third book, '<i>In Chancery'</i>, which was published in 1920. Bankruptcy also features. As Hunter has noted: </span><span class="Apple-style-span" style="font-size: x-small;">"Philip Bosinney, in Galsworthy's Forsyte Saga, could not have sought to defend Soames Forsyte's bankruptcy petition, on the grounds that it was principally, if not wholly, motivated by the desire of Soames, a very rich man, to revenge himself on his wife's lover." (Hunter at 501 ft.40a). We have discussed bankruptcy as a weapon on the blog before. In the Forsyte Saga Soames Forsyte (pictured right) seems to have been actuated not by a desire to participate in a distribution, but for more deep seated motivations. Bankruptcy is mentioned in chapter VII (Dartie v.s Dartie) of <i>In Chancery</i>:</span><br />
<span class="Apple-style-span" style="font-size: x-small;"><br />
</span><br />
<span class="Apple-style-span" style="font-size: x-small;"><i>"What worried him as a lawyer and a parent was the fear that Dartie might suddenly turn up and obey the Order of the Court when made. That would be a pretty how-de-do! The fear preyed on him in fact so much that, in presenting Winifred with a large Christmas cheque, he said: "It's chiefly for that chap out there; to keep him from coming back." It was, of course, to pitch away good money, but all in the nature of insurance against that <b>bankruptcy </b>which would no longer hang over him if only the divorce went through; and he questioned Winifred rigorously until she could assure him that the money had been sent. Poor woman!--it cost her many a pang to send what must find its way into the vanity-bag of 'that creature!' Soames, hearing of it, shook his head."</i></span><br />
<span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span><br />
<span class="Apple-style-span" style="font-size: x-small;">Chapter VI also notes:</span><br />
<span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span><br />
<span class="Apple-style-span" style="font-size: x-small;"><i>"</i></span><span class="Apple-style-span" style="font-size: x-small;"><i>When his son-in-law Dartie had that financial crisis, due to </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>speculation in Oil Shares, James made himself ill worrying over </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>it; the knell of all prosperity seemed to have sounded. It took </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>him three months and a visit to Baden-Baden to get better; there </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>was something terrible in the idea that but for his, James's, </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>money, Dartie's name might have appeared in the <b>Bankruptcy List."</b></i></span><br />
<span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-KFSVDf1tw8o/TdZaf0YO6uI/AAAAAAAABlg/P8jGd3yvkbA/s1600/kingston_university_cpetercook_jma300508.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="251" src="http://3.bp.blogspot.com/-KFSVDf1tw8o/TdZaf0YO6uI/AAAAAAAABlg/P8jGd3yvkbA/s320/kingston_university_cpetercook_jma300508.jpg" width="320" /></a></div><span class="Apple-style-span" style="font-size: x-small;">Galsworthy was a Kingston upon Thames resident and was born on Kingston Hill (the area where KLS is located). In 2007 Kingston University <a href="http://www.kingston.ac.uk/aboutkingstonuniversity/location/campuses/penrhynroad/">named a new £20 million building</a> (pictured left) after the sometime barrister, old Harrovian, and jurisprudence graduate of New College, Oxford. <a href="http://www.3paper.co.uk/about-us/john-galsworthy">Galsworthy was called to the bar in 1890</a>. He was awarded the Order of Merit in 1929 having previously turned down a knighthood. He was too ill to collect his 1932 Nobel prize. He died six weeks after the award. </span><span class="Apple-style-span" style="font-size: x-small;">For other debt related literature see </span><span class="Apple-style-span" style="font-size: x-small;"><a href="http://here./">here.</a></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.ceejbot.com/EricPorter/Forsyte/promos/2001-series-soames-hat.jpg and http://www.e-architect.co.uk/images/jpgs/architects/kingston_university_cpetercook_jma300508.jpg</span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-72963224413041844862011-05-20T08:36:00.017+01:002011-05-20T10:48:27.294+01:00What is a company for the purposes of Schedule B1, paragraph 3? - Panter v Rowellian Football Social Club & Ors [2011] EWHC 1301 (Ch) (20 May 2011)<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-R-qqN9LAAmQ/TdY3_fe5mgI/AAAAAAAABlc/K2x_yQUom-0/s1600/crest.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://3.bp.blogspot.com/-R-qqN9LAAmQ/TdY3_fe5mgI/AAAAAAAABlc/K2x_yQUom-0/s1600/crest.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">His Honour Judge Behrens has handed down his judgment in <i><a href="http://www.blogger.com/goog_1044483724">Panter v Rowellian Football Social Club & Ors</a></i><a href="http://www.bailii.org/ew/cases/EWHC/Ch/2011/1301.html"> [2011] EWHC 1301 (Ch) (20 May 2011)</a>. </span></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">The cases raises an interesting point for consideration, namely, can a 'club' (The <a href="http://www.useyourlocal.com/pubs/NN14+6EZ/rowellian-football-social-club/q/ref-20264/tab-pub-tab-aboutus">Rowellian Football Social Club</a>) be accounted a company for the purposes of jurisdiction to appoint an administrator. The learned judge concludes in the case that the court lacked jurisdiction and that a club of this nature is not a company. The case contains an interesting analysis of the company definition question. The judge notes in relation to the closet case on point: </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><i>"</i></span><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Re Witney Town Football and Social Club involved a social and recreational club. It had rules which in many respects were not dissimilar from the rules of the Rowellian Club. Thus it existed solely as a body for the purpose of professional football. It had power to elect honorary day members. Rule 17 was however different from rule 12 of the Club:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The club shall only be wound up by a resolution passed at a special general meeting called for that purpose and the assets of the club shall be disposed of after payment of all outstanding loans and dues … Upon dissolution of the club, all net assets shall be devoted to Association Football and not distributed between the members.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>The question arose as to whether the Club could be the subject of a compulsory winding up order. This turned on whether the Club was within the definition of unregistered company within the meaning of section 220 of the Insolvency Act 1986:</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>…the expression "unregistered company" includes any association and any company with the following exceptions …</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>At first instance it was held that the Club was not "an association" within the meaning of the definition and thus not amenable to the winding up jurisdiction. On appeal Morritt J (as he then was) upheld the decision of the county court judge.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>As Morritt J explained the words "any association" cannot be given their literal meaning. The question is whether Parliament could reasonably have intended a club of this sort to be subject to the statutory winding up procedure. He referred to the well known decision of Re St James Club (1852) 2 De GM at 387 where there is a discussion of the nature of a members' club and the Lord Chancellor held that such a club was not "an association" to enable it to be wound up.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Morritt J went on to consider whether the Witney Town Football Club was not a club in the ordinary acceptation of that term. He then considered the rules of the club concluding that none of the rules he had specifically referred to took it out of the ordinary acceptation of the term members club. The fact that the assets would not be distributed to the members on dissolution did not warrant the implication that Parliament intended it to be subject to the winding up procedure in the 1986 Act.</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: x-small;"><i>Mr Roberts sought to distinguish Re Witney Town Football Club on the basis that rule 12 of the Club's rules made no provision for dissolution and no provision for what would happen to the assets on dissolution. However in other respects the rules are very similar. There are familiar aspects of a members club including provisions for election, a management committee, subscriptions, expulsion and the like. In my view the Rowellian Club is just as much a members club as the Witney town Football Club. It is not an association within the meaning of section 220(1) of the Act."</i></span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">Judge Behrens concludes: "For all these reasons I have come to the relatively clear conclusion that there is no jurisdiction to appoint an administrator (either by the Court or otherwise) over an entity such as the Club. It follows that this application for an administration order falls to be dismissed." It seems as if insolvency can touch football at both ends of the divisions! </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://rothwelltown0.tripod.com/sitebuildercontent/sitebuilderpictures/crest.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-52863886024566466642011-05-20T07:57:00.025+01:002011-05-20T10:06:24.499+01:00Re Specialised Mouldings - any anecdotes or memories on the adoption of employment contracts saga?<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-qJcpRIGD4Tw/TdYuIaZIxFI/AAAAAAAABlY/Xl3JgYf9t8A/s1600/_56581_harman2.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://3.bp.blogspot.com/-qJcpRIGD4Tw/TdYuIaZIxFI/AAAAAAAABlY/Xl3JgYf9t8A/s1600/_56581_harman2.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">I have recently received an email from a former director of Specialised Mouldings Ltd, the company whose name will always been synonymous with the adoption of employment contracts issue and </span></span><a href="http://bankruptcyandinsolvency.blogspot.com/2009/04/happy-birthday-sir-jeremiah-harman-some.html"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Mr Justice Harman's (pictured) </span></span></a><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">famous unreported decision. The correspondent wrote:</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">"Andrew Conquest was administrative receiver of Specialised Mouldings Limited - a landmark case for insolvency practitioners in the area of employment liabilities </span></span></i></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">My husband.... and I founded and were directors and major shareholders in Specialised Mouldings and are interested to know a little about the the insolvency judgement by Sir Jeremiah Harman and the subsequent House of Lords ruling re. the Specialised Mouldings Letter....</span></span></i></div><div style="text-align: justify;"><br />
</div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">...the issuance of raw material import permits, likely caused the downfall of the business - we being unable to lay off workers even though we had no raw materials for completion of orders in hand."</span></span></i></div><div style="text-align: justify;"><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></i></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Do any of the blog readership have any memories of the turbulent period back in 1994 when the Insolvency Acts of that year were passed and the furore surrounding <a href="http://bankruptcyandinsolvency.blogspot.com/2011/03/landmark-moments-in-insolvency-history.html">Powdrill v. Watson</a>, etc?</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://3.bp.blogspot.com/_YrPhWhp-AW0/SeNhV4sSB9I/AAAAAAAAAL8/PBEER89GqF0/s400/_56581_harman2.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-49619721022378077102011-05-19T07:07:00.023+01:002011-05-19T15:17:44.262+01:00Memorandum of Understanding: IS, R3 and Jobcentre Plus<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-Ei5Qistjh3I/TdUlM0TBCPI/AAAAAAAABlQ/DW3BlAWcals/s1600/Insolpcwithweb.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://4.bp.blogspot.com/-Ei5Qistjh3I/TdUlM0TBCPI/AAAAAAAABlQ/DW3BlAWcals/s1600/Insolpcwithweb.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">The <a href="http://www.insolvency.gov.uk/">Insolvency Service</a> (IS - pictured), <a href="http://www.r3.org.uk/">R3</a> and <a href="http://www.direct.gov.uk/en/Employment/Jobseekers/ContactJobcentrePlus/DG_186347">Jobcentre Plus</a> have published a revised </span><a href="http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/iparea/MemorandumOfUnderstanding18May2011.pdf"><span class="Apple-style-span" style="font-size: x-small;">Memorandum of Understanding</span></a><span class="Apple-style-span" style="font-size: x-small;">. As <a href="http://www.r3.org.uk/index.cfm?page=1114&element=12949&refpage=1008">R3 note</a>, <i>"The 'Memorandum of Understanding' is an information sharing initiative initially set up by Phil Wilson, MP for Sedgefield. It facilitates close working between R3, the trade body for Insolvency Practitioners and Jobcentre Plus. Under the initiative, Insolvency Practitioners give ‘early warning’ of impending redundancies to Jobcentre Plus wherever possible, which helps the agency provide support to affected employees. </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>The Memorandum was originally signed in 2009 by Jim Knight and Ian Lucas, the Employment and Business Ministers at the time. There has since been routine information sharing and liaison between Jobcentre Plus and Insolvency Practitioners. A new Memorandum, aiming to foster yet closer working between partners, will be signed by Chris Grayling, Minister for Employment and Edward Davey, Minister for Employment Relations, Consumer and Postal Affairs."</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-Ily4qlC4sU0/TdUmVC24ZwI/AAAAAAAABlU/3ut3LY-vSqk/s1600/logotype.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="http://4.bp.blogspot.com/-Ily4qlC4sU0/TdUmVC24ZwI/AAAAAAAABlU/3ut3LY-vSqk/s1600/logotype.gif" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">Mr Phil Wilson MP commented: <i>“Losing a job is one of the most difficult situations people can face in their lifetime. It’s essential that they receive the right information at the right time to help them access training, claim benefits and find new employment. The Memorandum has already helped support thousands of individuals and, with many businesses continuing to struggle, it will play a key role for some time to come. With cross party support and with the recognition of the new Government, the joined up working between Jobcentre Plus and Insolvency Practitioners can go from strength to strength, to the benefit of the employees that sadly pay the price of business failure.”</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">R3 President, Ms Frances Coulson added: <i>“The insolvency profession sees the human cost of business failure on a daily basis. The Memorandum helps us to work with expert government agencies to ensure that those facing redundancy are given as much support as possible at a very distressing time.”</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.insolvency.gov.uk and http://www.r3.org.uk/</span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-70484970489325102272011-05-18T07:57:00.016+01:002011-05-19T15:06:42.724+01:00Insolvency in the news - kind banks and new books<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-2PNYa6upUhM/TdUjOA-a-7I/AAAAAAAABlM/gBj1ApXiOeo/s1600/bank-of-england.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="213" src="http://3.bp.blogspot.com/-2PNYa6upUhM/TdUjOA-a-7I/AAAAAAAABlM/gBj1ApXiOeo/s320/bank-of-england.jpg" width="320" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">An interesting </span><a href="http://www.dailymail.co.uk/money/article-1387085/True-scale-corporate-collapses-masked-banks.html?ito=feeds-newsxml"><span class="Apple-style-span" style="font-size: x-small;">insolvency related articl</span></a><span class="Apple-style-span" style="font-size: x-small;">e has appeared in the Daily Mail (I found it on a train honest!). The piece notes that banks (example pictured) are being kind and not putting companies into liquidation. The banks are instead writing off the indebtedness. The author notes:</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>"The trend indicates that banks have been less eager to take court action and more willing to accept other solutions such as taking a stake in a business in exchange for writing off debts. </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>But analysts warned it could also mean that banks were simply abandoning claims without forcing insolvency, allowing bust firms to keep trading and so hiding the real scale of business failures."</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">In other news, <a href="http://www.law.leeds.ac.uk/about/staff/keay/">Professor Andrew Keay's</a> new book has been published (<a href="http://www.e-elgar.co.uk/bookentry_main.lasso?id=13701&breadcrumlink=&breadcrum=&sub_values=&site_Bus_Man=&site_dev=&site_eco=&site_env_eco=&site_inn_tech=&site_int_pol=&site_law=&site_pub_soc=">Keay, A. <i>The Corporate Objective</i>. Edward Elgar, 2011</a>). Here is the abstract:</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>"</i></span><span class="Apple-style-span" style="font-size: x-small;"><i>The Corporate Objective addresses a question that has been subject to much debate: what should be the objective of public corporations? It examines the two dominant theories that address this issue, the shareholder primacy and stakeholder theories, and finds that both have serious shortcomings.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>The book goes on to develop a new theory, called the Entity Maximisation and Sustainability Model. Under this model, directors are to endeavour to increase the overall long-run market value of the corporation as an entity. At the same time as maximising wealth, directors have to ensure that the corporation survives and is able to stay afloat and pursue the development of the corporation’s position. Andrew Keay seeks to explain and justify the model and discusses how the model is enforced, how investors fit into the model, how directors are to act and how profits are to be allocated.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Analysing in depth the existing theories which seek to explain the corporate objective, this book will appeal to academics in corporate law and corporate governance as well as law, finance, business ethics, organisational behaviour, management, economics, accounting and sociology. Postgraduate students in corporate law and corporate governance, directors, and government regulators will also find much to interest them in this study."</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://www.itraveluk.co.uk/photos/data/502/bank-of-england.jpg</span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-25895602788571696802011-05-17T07:17:00.005+01:002011-05-17T17:25:18.612+01:00paragraph 63 of Schedule B1 to the Insolvency Act 1986 deployed - Lehman Brothers v International (Europe), Re [2011] EWHC 1233 (Ch) (17 May 2011)<div class="separator" style="clear: both; text-align: center;"><a href="http://3.bp.blogspot.com/-tItHH-iajJc/TdKgofPoVOI/AAAAAAAABlI/_MXhijVDP-Y/s1600/Royal_courts_of_justice.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="http://3.bp.blogspot.com/-tItHH-iajJc/TdKgofPoVOI/AAAAAAAABlI/_MXhijVDP-Y/s320/Royal_courts_of_justice.jpg" width="320" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">Mr Justice Briggs has handed down his judgment in </span></span><i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><a href="http://www.blogger.com/goog_808202766">Lehman Brothers v International (Europe), Re</a></span></span></i><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><a href="http://www.bailii.org/ew/cases/EWHC/Ch/2011/1233.html"> [2011] EWHC 1233 (Ch) (17 May 2011)</a> in the RCJ (pictured). The case concerns an application by the Administrators of LBIE for directions pursuant to paragraph 63 of Schedule B1 to the Insolvency Act 1986 (IA86) designed to enable them to identify client money and its traceable proceeds received or held by Lehman Brothers International Europe ("LBIE").</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://upload.wikimedia.org/wikipedia/commons/0/0e/Royal_courts_of_justice.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0tag:blogger.com,1999:blog-6391476958230949091.post-32959383498690088722011-05-16T09:15:00.019+01:002011-05-16T16:25:28.289+01:00IPs and Olympic tickets - Mr Hunt on the BBC<div class="separator" style="clear: both; text-align: center;"><a href="http://4.bp.blogspot.com/-5geWAayK7O0/TdFA_bmdW4I/AAAAAAAABlE/BNdSeNp38N4/s1600/john-humphreys.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="http://4.bp.blogspot.com/-5geWAayK7O0/TdFA_bmdW4I/AAAAAAAABlE/BNdSeNp38N4/s1600/john-humphreys.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">At the end of last month I posted <a href="http://bankruptcyandinsolvency.blogspot.com/2011/04/will-olympics-cause-upsurge-in.html">up a brief bit of commentary which mulled on the idea that the Olympics ticket regime might give rise to some irresponsible behaviour</a> in terms of people over extending themselves so as to be able to get hold of Olympics tickets. It was therefore with some surprise that I clocked Mr Stephen Hunt on the BBC Breakfast news this morning. He also appeared on the <a href="http://markmeynell.files.wordpress.com/2007/03/john-humphreys.jpg">Today programme talking about the same issue</a>, namely, the volume of tickets he has subscribed for, some £36,000 worth. Whilst his profession was not noted on the BBC Breakfast programme it has been <a href="http://www.bbc.co.uk/news/uk-13408398">mentioned on the website write up</a> and was mentioned on the <a href="http://news.bbc.co.uk/today/hi/today/newsid_9487000/9487046.stm">Today programme</a>. Indeed, it seems as if John Humphreys (pictured) had read my post having in mind his first question! Perhaps Stephen will be the subject to test my hypothesis! At least he will be able to advise himself if the worst happens! </span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br />
</span></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: http://markmeynell.files.wordpress.com/2007/03/john-humphreys.jpg</span></span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com2tag:blogger.com,1999:blog-6391476958230949091.post-67443984687137780122011-05-13T14:30:00.000+01:002011-05-14T16:26:53.251+01:00IS publication: Consultation on Restructuring Moratorium<div class="separator" style="clear: both; text-align: center;"><a href="http://2.bp.blogspot.com/-_wucaphXg20/TcvhtAWY8fI/AAAAAAAABlA/hR5e08U_pL4/s1600/Insolpcwithweb.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em; text-align: justify;"><img border="0" src="http://2.bp.blogspot.com/-_wucaphXg20/TcvhtAWY8fI/AAAAAAAABlA/hR5e08U_pL4/s1600/Insolpcwithweb.jpg" /></a></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;">The <a href="http://www.insolvency.gov.uk/">Insolvency Service (IS)</a> has </span><a href="http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/Moratorium/SummaryOfResponses.pdf"><span class="Apple-style-span" style="font-size: x-small;">published the results of the recent consultation on a restructuring moratorium</span></a><span class="Apple-style-span" style="font-size: x-small;">. The IS have also published </span><a href="http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/Moratorium/ResponseList.htm"><span class="Apple-style-span" style="font-size: x-small;">the responses</span></a><span class="Apple-style-span" style="font-size: x-small;"> (including some </span><a href="http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/Moratorium/responses/8.pdf"><span class="Apple-style-span" style="font-size: x-small;">confidential ones?!</span></a><span class="Apple-style-span" style="font-size: x-small;">) <a href="http://www.edwarddavey.co.uk/web/">Mr Edward Davey MP's</a> ministerial statement notes: </span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>"I am setting out today the stakeholder responses to our consultation on proposals for a </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>Restructuring Moratorium.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>When launching the consultation, the Government was focused on setting a path to </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>balanced and sustainable economic growth across the economy, with increasing jobs </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>and prosperity. This included looking at the challenges and risks faced by business in </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>the refinancing and restructuring of existing debts.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>The consultation document invited views on a Restructuring Moratorium which </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>would enable viable businesses, with a realistic prospect of implementing a successful </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>restructuring of their financial affairs, to obtain a flexible breathing space outside of a </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>formal insolvency procedure during which the restructuring could be negotiated and</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>implemented.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>Forty-two businesses, individuals, and representative bodies responded to the </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>consultation. Responses received suggest that, whilst the refinancing and restructuring </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>of company debt remains a valid concern, the urgency of the case for introducing such </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>a moratorium is not as great as previously thought. Those working on large </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>restructurings tell us that they have been able to use existing mechanisms to get </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>around some of the problems that the moratorium is designed to address.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>There have been suggestions that a greater impact might be achieved by the </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>restructuring moratorium were it also to tackle issues such as termination clauses </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>(whereby suppliers can cancel essential contracts and threaten the viability of</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>company’s rescue plans) and “cram down” mechanisms (to reduce the power of small </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>creditors to block proposals). These are significant and difficult issues. It would be </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>helpful to have further discussions with the main stakeholder groups to explore how </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>much support there might be for addressing these issues; the best way in which to do </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>so and the implications of introducing such further measures.</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i><br />
</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>The Government has therefore decided that the next step should be to publish the </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>responses to the consultation that it received to allow all concerned to understand the </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>various views expressed. My officials will then work with stakeholders both to refine </i></span><span class="Apple-style-span" style="font-size: x-small;"><i>the moratorium proposals and to consider in more detail the additional areas that have</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><i>been raised."</i></span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div style="text-align: justify;"><span class="Apple-style-span" style="font-size: xx-small;">Picture Credit: Insolvency Service. </span></div>Dr. John Tribe, Senior Lecturer in Law, University of Liverpoolhttp://www.blogger.com/profile/01467980377830600284noreply@blogger.com0