Law lords open door to foreign liquidators
Law lords agree that UK assets of insolvent companies based abroad should be given to creditors
Law lords agree that UK assets of insolvent companies based abroad should be given to creditors
The law lords have paved the way for foreign liquidators to seize UK assets
in cross-border insolvency disputes.
The UK’s highest court took the step partly to prevent valuable assets being
kept out of the reach of creditors when companies salt away holdings in offshore
subsidiaries.
Law lords backed the idea that the UK should co-operate with other
jurisdictions ‘as much as possible’ so the assets of insolvent companies based
abroad are given to creditors under an umbrella system.
Distressed asset managers and hedge funds are set to benefit because of the
bargaining power gained by having all of an insolvent company’s assets pooled in
one place.
The House of Lords made the watershed decision in response to a liquidation
case involving Australian company
HIH Insurance. The company
collapsed in 2001, with HIH holding reinsurance contracts written out of London.
Law Lords have now said that these assets should be sent to Australia for
distribution under Australian insolvency law.
‘The ruling may shift the starting point for how UK courts consider
international insolvency proceedings,’ Radford Goodman, a lawyer at Norton Rose
said.
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceInsolvency statistics in the UK for the second quarter of 2023 were the highest since 2009 with 83% of them relating to small businesses Read More...
View articleThere were 6,342 recorded company insolvencies in Q2, reflecting a 9% increase compared to the number of insolvencies in Q1, and a 13% increase compar...
View articleThe survey paints a “brightening” picture of the global economy, according to the ACCA Read More...
View articleThe pandemic may have “distorted” some economic data Read More...
View articleAdvisory firms must offer a “more supportive” and holistic approach to clients amid the economic downturn Read More...
View articleHaving a clear plan and clean data to help optimise the use of scarce resources will be key for businesses Read More...
View articleThe Coronavirus Job Retention Scheme has supported millions of jobs amid the pandemic, but with the support measure set to end in September, how can a...
View articleShift from BBL debt to equity could pose wider business implications Read More...
View article