Corporate insolvency issues aired

By Setutsi van Lare, ICAS Insolvency Technical Support

18 May 2015

The 2015 Corporate Insolvency Discussion Group Conference proved a forum for lively debate on key issues for the professional community, writes Setutsi van Lare.

Delegates at this year's well attended annual Corporate Insolvency Discussion Group Conference engaged in some lively and thought provoking discussion triggered by the presentations.

The event was chaired by Andy Davison, of EY and Michael Hughes, of MMS, and included great insights from a range of speakers and contributors.

First off the mark was Chris McKay, of Deloitte, who gave his assessment of the practice of insolvency past, insolvency present and his thoughts of what will – and may be – to come.

Chris said the impact of the Enterprise Act 2002, which some would say set in motion the momentum for change, an unprecedented recession which began to bite in 2008 and halted bank lending in its tracks, and increased regulation and scrutiny with pressure exerted on the profession to find 'solvent' solutions, have all taken their toll.

Delegates agreed that in order to deal with the changing landscape, the profession needs to be flexible and creative, and seek opportunities from non-traditional sources.  Large and small firms' response to changing conditions will no doubt differ.

The immediacy of social media has removed any 'time to co-ordinate' which previously may have been available before news became widespread.  The audience remarked that the Joint Insolvency Examination Board has to take account of  these factors and more to ensure the exams reflect current practice. Possessing good people and communication skills are now as relevant as technical competency, they said.

Melanie Martin, of MMS, alerted delegates to the importance of due diligence in cases where state aid may be considered as a means of financing.  There are strict rules to be adhered to and failure to do so could be extremely costly.  Challenges to state aid can be made up to 10 years of the grant. Where these are successful, grants are recovered inclusive of compound interest within a short period of time.

Glasgow 2014

Donald McNaught, of JCCA, shared some interesting angles from his once-in-a-lifetime opportunity with the Commonwealth Games through the 'Glasgow 2014 Limited in Members' Voluntary Liquidation'.  He was pleased to report that directors' resignations were not an issue in the winding up of the Games.

Organised crime is becoming ever more sophisticated and Bill Cleghorn, of AVER, invited delegates to take a look at the ActionFraud (National Fraud & Cyber Crime Reporting Centre) website for an insight into the inventiveness of the criminal mind.

The different interpretations by the courts of the law relating to administration expenses were considered by David Sellar, QC. This was followed by his opinion on insolvency set-off and mis-selling liabilities.  He concluded with a reference to Scottish Coal and a call for more judicial experience of insolvency law in the Court of Session.

Malcolm Robertson, of Charlotte Street Partners, drew the first part of the conference to a close. One of his key messages was the importance of building and maintaining strong foundations with the media.

He emphasised the importance of establishing strategic relationships and offering comment on a regular basis and not just in times of crisis.  Examples abound of instances where things have gone wrong, with unfortunate consequences, he said.

The afternoon was taken up with discussion of a case study which pulled together elements from the morning's presentations. Delegates formed groups to discuss the pros and cons of different options and considered which offered the best return for creditors.  In addition to the usual routes, some innovative solutions were put forward to take account of different scenarios.

All in all there was great engagement with some interesting contributions from those present at the Airth Castle event.

Topics

  • Insolvency

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