General issues

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This subtopic provides guidance on insolvency issues faced by financial institutions.

Legal reforms

The Financial Services Markets Act 2023 amends the UK’s insolvency arrangements for insurers in order to clarify certain elements, and to expand the protections available to an insurer and its policyholders undergoing insolvency or write-down procedures (see Practice Note: The Financial Services and Markets Act 2023—essentials).

Financial service firms and insolvency

Financial service firms play a key role in the economy and special rules have been created to cater for insolvency events. Part XXIV of the Financial Services and Markets Act 2000 deals with insolvency (ss 355–379A) and this Practice Note considers its interaction with the Banking Act 2009 and related secondary legislation to implement the special resolution regime across a range of business models: Financial services firms and insolvency provisions in FSMA 2000. The administration rules have also been

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Latest Restructuring & Insolvency News

Insurance giant Allianz warns of rising insolvencies in 2025

Law360, London: Company bosses and their insurers could face increased claims next year from a predicted rise in corporate insolvencies and class actions, Allianz warned on 5 December 2024.

High Court clarifies position of sole directors under Model Articles and the interaction between UK sanctions regulations and in-court appointment of administrators (Re KRF Services (UK) Ltd and others)

Restructuring & Insolvency analysis: This High Court case (which addresses two important issues in UK company law and sanctions regulations) will be of interest to insolvency practitioners, corporate and restructuring lawyers, sanctions lawyers, and businesses and individuals which are affected by sanctions. Firstly, it clarifies the position of sole directors under the Model Articles for private limited companies. The court ruled that a sole director can validly pass board resolutions and bind the company, regardless of whether they have always been the sole director or were previously part of a multi-member board. This interpretation resolves conflicts between Article 7(2) and Article 11(2) of the Model Articles, with the court favouring Article 7(2)'s provisions. Secondly, the case examines the interaction between UK sanctions regulations and the in-court appointment of administrators. The court determined that making an administration application and order does not breach asset-freezing sanctions, even when the company is designated or controlled by a sanctioned person. While an Office of Financial Sanctions Implementation (OFSI) license is typically required for administrators to act, the court retains discretion to make immediate appointments in urgent situations. Written by Joshua Ray and Duncan Henderson, partners at CANDEY, which acted for the First and Second Applicants on this matter.

Insolvency Service bans director for BBL fraud

The Insolvency Service has banned Nazia Khan, a sales consultant based in Dubai, from serving as company director for nine years for fraudulently securing a £25,000 bounce back loan (BBL) for her inactive company, LC247 Limited, by falsely declaring a £100,000 turnover. Khan misappropriated the funds for personal use, contravening the scheme's regulations and the company went into liquidation in February 2022, with debts surpassing £28,000.

Restructuring & Insolvency weekly highlights—5 December 2024

This week's edition of Restructuring & Insolvency weekly highlights includes: the need for expert evidence in Part 26A restructuring plans to comply with CPR 35 (Re Chaptre Finance Plc), an analysis of applications to set aside default judgment in insolvency proceedings (Scenic International Group Ltd (in provisional liquidation) v Adenaike), an analysis of successful fraudulent trading and other claims (London Capital & Finance v Thomson), plus a round-up of other news and cases for restructuring and insolvency professionals.

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