Insolvency Technical Update – June 2015
Insolvency technical update – Your round-up of recent developments in insolvency.
Corporate insolvency legislation changes
Changes to administration and the powers of liquidators came into effect on 26 May 2015 under provisions contained in the Small Business Enterprise and Employment Act 2015. Further details are available by searching 'insolvency changes' on icas.com.
Case Review checklists updated
The administration, court liquidation and creditor voluntary liquidation checklists have been updated to reflect recent legislative changes. Checklists are available by on the Insolvency legislation and Guidance page.
PPI receipts in closed trust deeds
IPs are reminded of the ICAS "Guidance Note on Payment Protection Insurance Mis-Selling Claims in Trust Deeds & Sequestrations".
PPI cheques received in respect of cases where there is no trustee in office cannot be intromitted with by the former trustee or their firm.
AiB guidance on process when auditing trustee accounts
The AiB has prepared, in consultation with ICAS and others, guidance on their processes when asked to issue a determination of trustee's remuneration. The guidance is available from the AiB website. If you have any comments on how the AiB is applying the guidance then please email David Menzies
PTD Notes for Guidance
The AiB has published updated Notes for Guidance for protected trust deeds. The latest version of the Guidance is available on the AiB website.
A new statutory instrument has been laid in the Scottish Parliament which will amend the Debt Arrangement Scheme (DAS) with effect from 27 June 2015. Student loans will become excluded from debt which must be included in a debt payment plan under DAS. Where the application
has not been made within the six week moratorium period provided for within sections 4A to 4D of the Bankruptcy (Scotland) Act 1985, the amended regulation restores the protections from diligence or sequestration between the time when an application for approval of a programme is made and decision of approval.
The AiB has also issued a statement amending its policy on the treatment of utility fuel debt in DPPs under DAS. Arrears of utilities being adjusted through pre-paid meters should now be included in any DPP in the same way as any other debt.
Insolvency Monitors' update
Information on Insolvency Monitoring activity in 2014 has been published on icas.com. The publication also summarises the key findings and issues from monitoring visits carried out in 2014 with the aim of sharing experience and educating ICAS IPs on the key issues identified.
Corporate Insolvency Discussion Group
A round up of the recent Corporate Insolvency Discussion Group conference is available by searching 'corporate insolvency issues' on icas.com
FCA issues guidance on the use of social media in financial promotions
The Financial Conduct Authority (FCA) has published guidance note FG15/4: Social media and customer communications providing guidance on financial promotions in social media and customer communications. The Guidance sets out the FCA's rules on financial promotions on social media, and provides examples of compliant and non-compliant communications to help organisations conform. A useful summary of the guidance is now available (summary by Reed Smith)
PPF issues guidance on IP remuneration
The Pension Protection Fund ('PPF') has published guidance which explains the Pension Protection Fund's approach to all payments made to insolvency office holders.
New EC Regulation on Insolvency published
A new EC Regulation on Insolvency (2015/848) has been passed and published by the European Council. Lexis Nexis has produced a useful summary of the new Regulation and of its effect. The new Regulation comes into effect on 26 June 2015 although the majority of the provisions do not take effect until 26 June 2017.
Case law updates
Proposed administrators need not consider director motives for administration (case summary by Taylor Wessing)
Validation of property transactions after petition to wind up (s127 IA 1986) (case summary by Squire Patton Boggs)
HMRC entitled not to repay overcharged VAT to insolvent company (case summary by Wragge Lawrence Graham & Co)
Whether sequestration could be awarded where the value of the security meets or exceeds the amount of debt (case summary by Legal Knowledge Scotland)
AiB Secondment opportunity
The AiB intend later in 2015, to commence a project to bring Scottish Corporate Insolvency Rules up to date. An opportunity exists for an insolvency specialist to be seconded to the AiB to provide expert knowledge and assistance. Appropriate arrangements will be made with any secondees' firm. If you are interested in this opportunity please contact David Menzies to discuss further.
Collective Redundancy Consultation
ICAS has called on the UK Government to improve the process for collective consultation on redundancies for employers who are facing insolvency. Read more about the ICAS response to a Call for Evidence on this matter.