British Steel has entered compulsory liquidation today with EY being appointed as special managers. Is British Steel the first real victim of Brexit? First, as a result of the delay in the UK’s divorce deal, the EU delayed granting carbon credits to British Steel necessitating a £120m loan from the government to stave off significant penalties in relation to its emissions targets. The directors now cite “Brexit-related issues” as the reasons for the failure of the business, with the on-going uncertainty over future tariffs and trading terms resulting in the company’s order book from Europe falling off a cliff. Continue Reading Steel yourselves – troubles ahead?
A disguised remuneration scheme (DRS) is a tax avoidance scheme, many of which involve artificial remuneration arrangements between an employer and employee. The schemes commonly provide for an employee to be partially remunerated through the company payroll system but with the majority of their remuneration taking the form of a loan. The loan is often funded via a third party (typically an off-shore trust) but, where the loans are never intended to be repaid, HMRC treat the monies advanced as taxable income. Continue Reading Disguised Remuneration Schemes and the Loan Charge
A Georgia bankruptcy court on April 17 issued a significant ruling that breaks new ground concerning how future claimants’ representatives in asbestos bankruptcies (“FCRs”) are chosen. In In re The Fairbanks Co., Case No. 18-41768-PWB (Bankr. N.D. Ga. April 17, 2019), the bankruptcy court held that (i) any party in interest may nominate an FCR candidate for the court’s consideration, (ii) the court must apply an “independent inquiry” into a proposed FCR’s qualifications, without giving deference to the debtor’s nomination, and (iii) “the proper standard for consideration of a future claims representative is akin to that of a guardian ad litem such that the individual must not only be disinterested and qualified, but also objective, independent, and loyally committed to protecting the interests of future claimants.” Continue Reading Georgia Court Adopts New Procedures and Standards for Appointing Future Claimants’ Representatives in Asbestos Bankruptcies
In the recent UK case of Wright and others v HMV Ecommerce Limited and another  EWCH 903, the Court considered whether an electronic filing (e-filing) of a notice of appointment of administrators by directors outside the court’s opening hours was valid. Continue Reading E-filing of administration appointments – don’t get your wires crossed
On 10 April 2019, the government launched an Independent Review into the Quality and Effectiveness of Audit. This comes at a time when the Business Select Committee has called for the Big 4 accountancy firms to be split up and also reports in the news that following the failures of Carillion, Patisserie Valerie, Interserve and others, shareholders are going to give very close scrutiny to the performance of auditors and not merely rubber-stamp their re-appointment at annual general meeting. Continue Reading Call for Views on the Quality and Effectiveness of Audit
There are many issues that can hinder the collection of book debts and insolvency (of either the creditor or the debtor) is usually the catalyst for most them. Following an insolvency, those attempting to collect book debts are often faced with a number of reasons as to why a debtor can’t or won’t pay, including the set-off / contra arrangements, product warranty concerns, defective or non-delivery of goods or services and last, but not least, retention of title (“RoT”) clauses. Continue Reading Retention of title – the unpaid seller v. the asset based lender
In the recently reported case of Misra Ventures Ltd v LDX International Group LLP  EWCA Civ 3030, the UK Court of Appeal considered what constituted a genuine and serious cross-claim sufficient to justify an injunction restraining the presentation of a winding up petition. Continue Reading UK Court of Appeal considers what amounts to a genuine and serious cross-claim
The number of times Mrs May’s Brexit deal is being put to the vote in the House of Commons may remind some of the film “Groundhog Day”. At least in that film there was a happy ending – can the same be said when Brexit is finally done and dusted?
In the World Bank’s “Doing Business 2017“ Report, the UK was listed as the 7th best country in which to start a business. Will that remain the case once we leave the EU? The news that many financial services companies are relocating their headquarters to EU bases, Honda is preparing to close its plant in Swindon by 2021 with the loss of 3,500 jobs, the recent collapse of Interserve and the failure of a host of high street retailers over the past few months does not bode well. Some of these events may have occurred even if Brexit was not in play – but certainly, Brexit has had an impact. What, ultimately, could be the cost to UK business of Brexit, even if a deal is ultimately agreed?
Continue Reading Will Britain be open for business post-Brexit?
In the recent case of BTI 2014 LLC v Sequana SA & others, the Court of Appeal considered (1) whether section 423 of the Insolvency Act 1986 could apply to the payment of a dividend and (2) when a director’s duty to consider the interests of creditors arises. The Court held that a dividend is capable of being a transaction at an undervalue within the meaning of section 423(1) of the Insolvency Act 1986 and commented that a director’s duty to creditors arises when directors know or should know that the company is or is likely (i.e. probable) to become insolvent.
Continue Reading When can a payment of a dividend be a transaction defrauding creditors?