Lexis®PSL Restructuring and Insolvency monthly highlights—January 2017

January 2017 highlights from the Lexis®PSL Restructuring and Insolvency team. This month’s highlights include the recent Brexit decision from the Supreme Court, our plans for dealing with the new Insolvency (England and Wales) Rules 2016, together with a round up of other restructuring and insolvency news and cases.

Restructuring & Insolvency—looking ahead to 2017

Our panel of experts—Chris Laughton of Mercer & Hole, Frances Coulson of Moon Beever, Mark Sands of RSM and Nick Hood of Opus Business Services—consider what lies ahead for R & I lawyers in 2017—see blog post—Restructuring & Insolvency—looking ahead to 2017.

Rare appellate decision on a very common argument

In what circumstances can a guarantor avoid a call on the guarantee by the lender on the ground of misrepresentation? Joseph Curl, barrister at 9 Stone Buildings, reviews the appellate decision in Gaind v Dunbar Assets plc in which he acted for the lender—see blog post: Rare appellate decision on a very common argument.

Update on the Insolvency (England and Wales) Rules 2016

The Insolvency (England and Wales) Rules 2016, SI 2016/1024 (IR 2016) are due to come into force on 6 April 2017. The team at Lexis®PSL have been busy creating a number of resources to help you understand the new rules which can be found in our new subtopic The Insolvency (England and Wales) Rules 2016—overview. In addition, one of the most significant and immediate impacts of the new rules is that, while Companies House and the Insolvency Service will continue to produce some forms, the format of other notices and documents will no longer be in a prescribed form. LexisNexis is working with leading practitioners from the insolvency profession to produce suggested forms to replace the existing prescribed forms, which we expect to be widely adopted by the industry.

Brexit update

On 24 January 2017, the Supreme Court upheld the High Court’s verdict that the government cannot trigger Article 50, TEU without Parliamentary say-so. In a majority vote of eight votes to three, the Court found that the European Communities Act 1972 (ECA 1972) requires an Act of Parliament to initiate the process of withdrawing from EU Treaties, and Article 50 TEU cannot be triggered by government ministers alone. Crucially, the Court unanimously ruled the government has no legal obligation to consult the devolved nations of Scotland, Wales and Northern Ireland over the triggering of Article 50 TEU. Legal experts believe the required Act of Parliament to set in motion the UK's withdrawal will likely trigger a period of major constitutional debate, throwing the Prime Minister’s March 2017 deadline into some doubt.

Headlines (News updates & analysis)

Changes to the Banking Act 2009—what will they mean in practice?

Jeremy Jennings-Mares, partner at Morrison & Foerster, explains the background to the Bank Recovery and Resolution Order 2016, SI 2016/1239 and considers its key changes—see blog post: Changes to the Banking Act 2009—what will they mean in practice?

Partnerships and prohibited names under section 216 (Re Newtons Coaches Limited)

James Rea-Palmer of Squire Patton Boggs LLP, considers the decision in Re Newtons Coaches Limited, a case concerning the applicability of section 216 of the Insolvency Act 1986 (IA 1986) to partnerships—see blog post: Partnerships and prohibited names under section 216.

What is the scope of the Berkeley Applegate principle? (Gillan and others v HEC Enterprises Ltd and others)

Katie Longstaff, barrister at St Philips Stone Chambers, discusses the recent case of Gillan and others v HEC Enterprises Ltd and others and warns that office-holders should think carefully before embarking on costly trust-related work—see blog post: What is the scope of the Berkeley Applegate principle? (Gillan and others v HEC Enterprises Ltd and others).

Court considers common form indemnity provision in partnership agreement (Wood v Priestley)

Mark Cawson QC at Exchange Chambers, assesses the practical implications of the judgment in Wood v Priestley concerning the interpretation of an indemnity clause in a partnership agreement between a salaried partner and the equity partners—see blog post: Court considers common form indemnity provision in partnership agreement (Wood v Priestley and another).

Can a trustee in bankruptcy pursue a deceased bankrupt’s spousal claims? (Robert v Woodall)

Robert v Woodall concerned the dismissal of an oral renewal by a trustee in bankruptcy (trustee) appealing the strike out of his claim under sections 23 and 24 of the Matrimonial Causes Act 1973.

PRA increases deposit protection limit

The deposit protection limit under the Financial Services Compensation Scheme is reset to £85,000 from 30 January 2017.

King & Wood Mallesons LLP enters administration

The UK and Europe division of King & Wood Mallesons has entered into administration, in what is reportedly the largest UK law firm collapse to date. It has been reported that the first notice of intention to appoint administrators was filed in December 2016, following failure to secure partner support for a recapitalisation scheme. Reports later suggested that the proposed administrators, Alix Partners, withdrew over funding issues and Quantuma have been appointed as administrators instead.

Corrigendum to insolvency proceedings Regulation published in the Official Journal

A Corrigendum to Regulation (EU) 2015/848(the Recast Regulation) of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings has been published in the Official Journal confirming that the new rules apply only to insolvency proceedings opened from 26 June 2017 (the previous wording was 'after 26 June 2017').

Deregulation Act 2015, the Small Business, Enterprise and Employment Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016 (Consequential Amendments and Transitional Provisions) Regulations 2017

Amendments are made to financial services legislation in consequence of insolvency reforms made by the Deregulation Act 2015 and the Small Business, Enterprise and Employment Act 2015. Transitional provisions are also made.

Cases

Thomas and another v Frogmore Real Estate Partners GP1 Ltd and others, Frogmore Real Estate Partners GP1 Ltd and others v Thomas [2017] EWHC 25 (Ch), [2017] All ER (D) 73 (Jan)

Abstract: The Chancery Division made a declaration to the effect that the centre of main interest of three companies was in the United Kingdom and that, as a result, it had jurisdiction to make orders concerning the administration of the companies. On the evidence, there had been no improper motive on the part of the building society that had made loans to the companies, and an application for a declaration that there had been would therefore be dismissed.

Gillan and others v HEC Enterprises Ltd and others and other applications [2016] EWHC 3179 (Ch), [2016] All ER (D) 103 (Dec)

Abstract: The Chancery Division considered an application by the administrators of two companies in administration which had provided services to the rock band Deep Purple for an order granting them a right of indemnity out of the trust assets of the two companies for the administrators' remuneration, costs and expenses in relation to the administration and management of the assets. The court distinguished the case of Berkeley Applegate (Investment Consultants) Ltd, Re, Harris v Conway [1988] 3 All ER 71 from the present case.

Re Oraki; Oraki and another v Dean & Dean (a firm taken over by the Law Society) [2017] EWHC 11 (Ch), [2017] All ER (D) 26 (Jan)

Abstract: The Chancery Division dismissed the applicants' application for the annulment of a bankruptcy order and/or for the review and variation of the award. The bankruptcy orders had not been obtained by fraud and, although there had been a misconception in the evidence given to the court, it had been corrected before any order had been made.

Dates for your diary

Date Event
1 or 2 February 2017 Appeal hearing (Court of Appeal): Tchenguiz and others v Grant Thornton UK LLP and others

Decision being appealed: [2015] EWHC 1864 (Comm), [2015] All ER (D) 36 (Jul)

About this blog post

This is a shortened version of the LexisPSL Restructuring and Insolvency Monthly Highlights which was first published on LexisPSL Restructuring and Insolvency.

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