Taylor Wessing updates

Payment of interest on proved debts
Taylor Wessing
  • Insolvency & Restructuring
  • United Kingdom
  • 05 January 2018

The Court of Appeal recently held that there is a complete statutory code for interest recovery on proved debts in administrations and liquidations. Further, the court stated that statutory interest represents compensation for dividends paid after the administration, and does not depend on any right to interest under the underlying claim.

Court provides further clarification on distinction and appropriate use of rescission and annulment of bankruptcy order
Taylor Wessing
  • Insolvency & Restructuring
  • United Kingdom
  • 22 December 2017

A recent Court of Appeal case has clarified that where the underlying liability on which a bankruptcy order is made is subsequently set aside, the correct remedy is rescission under Section 375(1) of the Insolvency Act. Further, annulment under Section 282(1)(a) is the appropriate remedy when, on grounds existing at the time of making the bankruptcy order, the order ought not to have been made.

Can the terms of a settlement agreement be challenged under Section 127 of the Insolvency Act 1986?
Taylor Wessing
  • Insolvency & Restructuring
  • United Kingdom
  • 24 November 2017

In between the presentation of a winding-up petition and the making of a winding-up order, a company entered into a settlement agreement with its founder. The judge concluded that the intended claims by the company's liquidators were not barred by the agreement. The judge also held that the release of contractual rights constituted a disposition, as did a promise not to sue. The provisions of the settlement agreement were therefore void.

Application by Lehman's administrators on distribution to shareholders
Taylor Wessing
  • Insolvency & Restructuring
  • United Kingdom
  • 17 November 2017

The administrators of Lehman Brothers Europe Ltd recently brought an application for directions on whether to make a substantial distribution of surplus to the company's sole shareholder while the company was in administration and the administrators' role in that distribution. To navigate around the Insolvency Act, the administrators devised a nifty strategy whereby the distribution would be made using the residual powers still vested in the directors and shareholders of the company pursuant to the Companies Act.

Legal professional privilege and bankruptcy
Taylor Wessing
  • Insolvency & Restructuring
  • United Kingdom
  • 03 November 2017

A court recently confirmed that legal professional privilege does not automatically vest in the trustee in bankruptcy. Legal professional privilege is a fundamental human right such that express statutory powers would be necessary to deprive the bankrupt of that right. Therefore, the bankrupt would need to waive privilege or consent to the use of privileged documents.

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