The construction industry has never been a stranger to insolvency. There are many factors for insolvency practitioners appointed over a part complete site to consider – security issues, engaging with contractors, creditors and suppliers at the earliest opportunity, not to mention the potential health and safety exposure. The insolvency practitioner will also need to make a decision as to whether to complete a development over which they are appointed or sell the site in whatever…

The availability of the remedy of subrogation has been explored at length by the courts recently. The leading authority of Bank of Cyprus Limited v Melenaou is thought to be the first of its kind where a lender has been entitled to be subrogated to an unpaid vendor’s lien where the lender did not advance funds for the purchase of the property. The principles identified in that case were considered and applied in the case…

The High Court has recently held that an individual may claim the proceeds of the sale of assets subject to an agricultural charge by the application of the equitable remedy of marshalling. Agricultural Sector The agricultural or farming sector includes a combination of unique assets and ownership structures that have given rise to a bespoke form of security. The Agricultural Credits Act 1928 (“ACA 1928”) allows a farmer to grant an agricultural charge to a…

The presumption that courts normally validate dispositions by a company subject to a winding up petition if such dispositions are made in good faith and in the ordinary course of business has been called into question in the recent case of Express Electrical Distributors Ltd v Beavis and others [2016].  Whilst the court has discretion to validate a disposition, it was considered that the court must balance the interests of the recipient of the company’s…

A new fee structure in respect of insolvency fees payable to the Insolvency Service came into force on 21 July 2016, pursuant to The Insolvency Proceedings (Fees) Order 2016 (SI 2016/692) (the “Order”), which revokes The Insolvency Proceedings (Fees) Order 2004 (SI 2004/593) and all ten subsequent amendment orders. The Order increases the deposits and case administration fee payable in creditor’s petition bankruptcy proceedings (deposit increasing from £825 to £990 and case administration fee increasing…

Last week the UK Government issued a consultation document on changing UK insolvency legislation to enable distressed companies to obtain a moratorium for up to three months, with the possibility of an extension, under the supervision of an insolvency practitioner. The moratorium would prevent all creditors, including secured creditors, from taking any enforcement action against such companies without first applying to court for permission to do so. This follows a briefing paper published by R3 last month suggesting a similar moratorium process.…

Directors of a company are subject to certain duties under the Companies Act 2006. These duties are of obvious importance throughout their service as a director but some of them become particularly important during the period leading up to the insolvency of the company. If a current or former director of a company knew or ought to have concluded at a point before the commencement of administration or insolvent liquidation that there was no reasonable…