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September 2016 highlights from the Lexis®PSL Restructuring and Insolvency team. This month’s highlights include a look at the latest in the Lehmans’ waterfall saga, guidance from Snowden J on shareholder class issues in Re SABMiller plc, consultations on bonding arrangements and SIP 15 plus a round up of other interesting cases and developments.
Re Lehman Brothers International (Europe) (In Administration); Lomas and others v Burlington Loan Management Ltd and others  EWHC 2131 (Ch),  All ER (D) 81 (Aug)
Katherine Hallett, barrister at Three Stone, considers the latest decision in the Lehman Brothers litigation in which the Commercial Court considered how administrators should handle post-administration interest in particular circumstances—see News Analysis: The saga continues—post-administration interest and how to handle it.
Re SABMiller plc  EWHC 2153 (Ch),  All ER (D) 47 (Sep)
Scott Morrison, Of Counsel at Orrick, explores Re SABMiller plc and examines the impact of a scheme of arrangement in a merger transaction on shareholder class composition—see News Analysis: Tackling class issues in schemes of arrangement.
Re Whyte, Brittain and another v Whyte and another  Lexis Citation 545,  All ER (D) 03 (Sep)
In light of the ruling in Re Whyte, Brittain and another v Whyte, Marcia Shekerdemian QC, barrister at Wilberforce Chambers, who acted for the applicants, discusses the main legal issues and arguments before the court, and what trustees in bankruptcy would be prudent to take away from this decision—see News Analysis: Evaluating the effect of restraint orders on bankruptcy.
Update to the timing announcement for the Insolvency (England and Wales) Rules 2016
At the Institute of Chartered Accountants in England and Wales’ Insolvency and Restructuring Group’s roadshow on 22 September 2016, the Insolvency Service said that it was aiming to lay the new insolvency rules before Parliament week commencing 10 October 2016, with a commencement date of 6 April 2017, subject to Ministerial approval (see News Analysis: Update to the timing announcement for the Insolvency (England and Wales) Rules 2016).
Subscribers to Lexis®PSL Restructuring and Insolvency can access our Annotated Guide to the New Insolvency Rules written by Dr John Tribe and Susan Morgan. The Annotated Guide to the New Insolvency Rules compares, on a rule-by-rule basis, the IR 1986 and the draft new insolvency rules as they were published in July 2015. The Annotated Guide to the New Insolvency Rules will be updated once the new insolvency rules are laid.
Validity of appointment and costs of administration—application of Duomatic principle
Re BW Estates Ltd, Randhawa and another v Turpin and another  EWHC 2156 (Ch),  All ER (D) 188 (Jul)
After the court had, in prior proceedings, rejected an application by creditors for orders disallowing or reducing the remuneration and expenses of the company’s former administrators, the applicant creditors sought a declaration that the former administrators had not been validly appointed as the director’s meeting was inquorate. Warren Bank, commercial and insolvency barrister at St Philips Stone Chambers, considers the claims in Re BW Estates Ltd, Randhawa v Turpin.
Bankruptcy order refused where creditors issued petition for ulterior purpose
Re Maud, Maud v Aabar Block S.a.r.l and another  EWHC 2175 (Ch),  All ER (D) 51 (Sep)
In Re Maud the High Court considered how it should approach a bankruptcy petition alleged to have been presented for an ulterior purpose. Tina Kyriakides, barrister specialising in insolvency law at Radcliffe Chambers, sets out what lessons can be learned from this case (see News Analysis: Bankruptcy order refused where creditors issued petition for ulterior purpose).
Reviewing the corporate insolvency framework
The Insolvency Service (IS) is currently analysing responses to its consultation on ways to improve the corporate insolvency framework and provide a stronger framework to rescue viable businesses. The IS says the feedback will help shape the government’s policy to enable the rescue of viable distressed businesses.
Changes to better insolvency bonding arrangements sought
A new inquiry will focus on whether changes should be proposed to the legislation governing bonding arrangements, the IS has announced. The IS stated it had received complaints that the current arrangements were failing to protect creditors. The deadline for responses to the consultation is 16 December 2016.
Joint Insolvency Committee consults on draft SIP 15
A revised version of the Statement of Insolvency Practice (SIP) 15 has been published by the Joint Insolvency Committee (JIC), the Institute of Chartered Accountants in England and Wales has announced. SIP 15 relates to reporting and providing information on certain functions to committees in formal insolvencies. The deadline for responses to the consultation was 12 September 2016.
Changes to appeals in corporate insolvency proceedings
The Insolvency Rules 1986, SI 1986/1925 are amended by the Insolvency (Amendment) (No. 2) Rules 2016, SI 2016/903 to alter the routes of appeal as concerns corporate insolvency court decisions and make provision for the court to which an appeal will lie against a decision in proceedings under the Insolvency Act 1986 relating to corporate insolvency.
The changes include that appeals of decisions made:
The amendments come into force on 3 October 2016.
DRO2 service from Insolvency Service goes live
The Insolvency Service started a phased roll-out of its new Debt Relief Order service (DRO2) service on 1 September 2016. For the first 15 days the DRO2 was only available to two or three Competent Authorities in order ensure the system was working as it should. The service will be extended to all Competent Authorities by 30 September 2016.
Bankruptcy (Scotland) Act 2016 (Commencement) Regulations 2016, SSI 2016/294
The Bankruptcy (Scotland) Act 2016 will come into force on 30 November 2016. The Bill for the Bankruptcy (Scotland) Act 2016 (B(S)A 2016) received Royal Assent on 28 April 2016 and consolidates and replaces Scots bankruptcy law, as well as the law of trust deeds for the benefit of creditors.
Hosking and another v Apax Partners LLP
 EWHC 1986 (Ch),  All ER (D) 193 (Jul)
The Companies Court dismissed an application by the joint liquidators of Hellas Telecommunications (Luxembourg) II SCA for a general stay of proceedings which they had brought in the English court, seeking relief under section 213 of the Insolvency Act 1986 (alleged fraud) and under section 423 of the Act (alleged transaction at an undervalue), in circumstances where parallel proceedings were pending in the United States. The court held, among other things, that it was not right to criticise the defendants as having caused the two sets of proceedings in a culpable way, that any judgment in the US action would not be binding on them, and that the fraud claims should be dealt with as soon as practicable. A short stay until 3 October 2016 was granted for case management reasons in view of the imminence of a decision by the US court on forum non conveniens, which might result in additional defendants agreeing to be joined to the English proceedings.
Re Kiss Cards Ltd; Smith v Lawson
 EWHC 2176 (Ch),  All ER (D) 10 (Sep)
The Chancery Division, in partially allowing the applicant liquidators of a company's application, ordered the second respondent to repay the company the benefit she had obtained from transactions found to be at an undervalue, being 50% of their total. Further, the respondents had not been entitled to any credit for the individual items claimed as credits or a full reconciliation of all the payments between the respondents and the company absent an explanation for the individual items.
Re Bishop; Golstein v Bishop
 EWHC 2187 (Ch),  All ER (D) 27 (Sep)
The Chancery Division considered an appeal from a decision of a District Judge, in which she had refused the appellant's application for revocation of a decision passing a proposal that the first respondent enter into an individual voluntary arrangement (IVA). The court held that there had been a material error in the failure by the respondent to disclose, among other things, proceedings against him by the Solicitors Disciplinary Tribunal in his IVA proposal and to the creditors prior to a meeting in which the appellant was allowed to enter into the IVA.
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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