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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Legal Developments Worldwide

Articles contributed by Druces

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New revised guidelines for administrators in pre-pack sales

December 2013 - Insolvency & Restructuring. Legal Developments by Druces.

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Pre-pack sales by administrators are now used frequently enough for most people in business to be aware of them and many have come across them in their business lives. A small amount of controversy still attaches to pre-packs, but it is probably right to say that they are now an accepted part of the UK business scene as a useful means of rescuing a business in difficulty and preserving some or all of the jobs connected with the business.

SIP161, the guidelines for insolvency practitioners carrying out a pre-pack sale, issued in 2009 by the Association of Business Recovery Professionals (and commissioned by the Joint Insolvency Committee (JIC)2) have been revised. The revised guidelines took effect from 1 November 2013. The revised SIP16 defines a pre-pack sale as follows:‚Ä©

 

‚Äė... an arrangement under which the sale of all or part of a company's business or assets is negotiated with a purchaser prior to the appointment of an administrator and the administrator effects the sale immediately on or shortly after, his appointment.' ‚Ä©

Commercial rent arrears recovery: 
stress no more?

October 2013 - Insolvency & Restructuring. Legal Developments by Druces.

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If a tenant of commercial property does not pay its rent as it falls due one of the most effective remedies for a landlord has been to exercise Distress - the common law right to recover rent arrears by seizing and selling a tenant's goods. That right is soon to be abolished and replaced with a new system of commercial rent arrears recovery (CRAR). ‚Ä©

The EC Commission’s proposal for changes to the EC regulation on insolvency proceedings

July 2013 - Insolvency & Restructuring. Legal Developments by Druces.

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Druces currently authors the Insolvency and corporate restructuring section of The In-House Lawyer magazine. For more information and articles from this author click here.

The EC regulation on insolvency proceedings1 (the Regulation) was introduced as a directive taking effect in the laws of member states of the European Union, without the need for member states to pass any local law of implementation. It has been part of EU law and the law of the United Kingdom since 31 May 2002. Insolvency laws vary across the member states of the EU, so a framework was needed to allow the patchwork of differing local laws to interact as efficiently as possible. The Regulation applies in all the member states of the EU, except Denmark, which exercised its right to opt out. 

Rent in administration proceedings: a headache for landlords

May 2013 - Insolvency & Restructuring. Legal Developments by Druces.

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Druces currently authors the Insolvency and corporate restructuring section of The In-House Lawyer magazine. For more information and articles from this author click here.

An important area of insolvency law ‚Äď the liability of a company in administration to pay the rent under the lease of its premises ‚Äď which until recently had been relatively clear and straight forward, is currently in an unsatisfactory state. This was not always the case, as, until quite recently, landlords and administrators could easily assess where they stood under the flexible approach that prevailed for many years. Unfortunately, as occasionally happens with insolvency law in the UK, a relatively minor change in the law leads to a re-examination of the position. The matter comes before the court, which feels constrained to interpret the law in a way ‚Ä®that leads to an impractical result. There then follows a clamour for a change to the law. It is a pattern that we have seen several times before. ‚Ä©

Freight forwarder’s contractual lien versus the administration moratorium

March 2013 - Banking and Finance. Legal Developments by Druces.

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Druces currently authors the Insolvency and corporate restructuring section of The In-House Lawyer magazine. For more information and articles from this author click here.

Our article in The In-House Lawyer's March 2010 issue (‚ÄėThe effective use of liens to protect against the collapse of corporate customers', issue 178, p41-43) dealt with the need for logistics services providers to have an effective contingency plan to cope with the prospect of their retailer customers defaulting on payments or going into administration or liquidation. Following the latest unfortunate round of high-street retailer collapses, including Comet, HMV and Blockbusters, the issues discussed in that article are now just as relevant to freight forwarders, hauliers, shipping lines and other creditors with rights of lien. Since the publication of issue178, a case on general contractual liens has come before the High Court and provides useful confirmation of the rights of holders of a contractual general lien over goods. ‚Ä©

The long arm of insolvency law disarmed

December 2012 - Banking and Finance. Legal Developments by Druces.

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Druces currently authors the Insolvency and corporate restructuring section of The In-House Lawyer magazine. For more information and articles from this author click here.

In the November 2011 issue of 
The In-House Lawyer we looked at the Court of Appeal decision in New Cap Reinsurance Corporation Ltd (in liquidation) & anor v Grant & ors (as members of Lloyd's Syndicate 991 for the 1997 Year of Account) & anor [2011] and the decision, also in the Court of Appeal, of Rubin & anor v Eurofinance SA & ors [2010], which preceded it.



Wrongful trading, the benchmark for directors’ duties: recent developments

September 2012 - Banking and Finance. Legal Developments by Druces.

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The wrongful trading provisions of the Insolvency Act 19861 were introduced following the recession of the early 1980s, having been previewed in the Cork Report. Although new to English law in 1986, the concept of wrongful trading has not resulted in a plethora of cases against directors reaching court.

De facto directors: Holland v Revenue and Customs & anor [2010]

March 2011 - Insolvency & Restructuring. Legal Developments by Druces.

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A recent Supreme Court judgment in Holland v Revenue and Customs (HMRC) [2010] has considered the status of de facto directors and, on a 3-2 split decision, limited the applicability of the concept. The decision is controversial because it will provide a defence in certain circumstances for persons controlling companies who are not officially directors of them against claims by liquidators and other parties interested in the winding up of those companies.‚Ä©

Guarantee stripping in company voluntary arrangements: landlords fight back

January 2011 - Insolvency & Restructuring. Legal Developments by Druces.

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A fashion retailer and wholesaler, part of an Italian group, had 11 retail shops and 14 concessions in department stores in the UK, through which it sold garments supplied from Italy by its parent company. The company got into financial difficulties and considered a restructuring involving the planned closure of some of its stores and the surrender of leases with several years left to run. This was clearly going to be an expensive exercise, given that the shops were in upmarket locations and let at relatively high annual rents. Eventually, it was decided to put the company into administration so that the administrators could propose a company voluntary arrangement (CVA), with the intention that four stores would be closed and the leases would be effectively surrendered by the terms of the CVA. The CVA was seen as a mechanism through which the Italian parent company would be released from its obligations under the guarantees given to the landlords of two of the stores. This ‚Äėguarantee stripping‚Äô had been attempted previously by the Powerhouse group, although in Prudential Assurance Company Ltd & ors v PRG Powerhouse Ltd & ors [2007] its CVA was overturned by the court on the basis that the release of the parent company from guarantees given to its subsidiaries‚Äô landlords constituted unfair prejudice under s6 of the Insolvency Act 1986 (the 1986 Act). ‚Ä©