Insolvency technical update – January 2020
Insolvency technical update – your round-up of recent developments in insolvency.
The Money Laundering and Terrorist Financing (Amendment) Regulations 2019
Legislation to implement the EU’s fifth AML Directive became effective on 10 January 2020. An article has been published on the ICAS website looking at the changes that firms require to be aware of.
A further article has been produced looking at the obligation to report any discrepancies identified in relation to an obliged entity’s register of people with significant control.
Companies House form
Companies House have made available new form VAMC (Scot), which should be used to tell Companies House about a court order in respect of a voluntary arrangement or moratorium for a company registered in Scotland.
ICAS Code of Ethics
A revised and restructured Code of Ethics was introduced by ICAS on 1 January 2020. The new Revised and Restructured Part 5 of the 2020 ICAS Code of Ethics for Insolvency Practitioners will be published in due course. The specific provisions for Insolvency Practitioners when performing insolvency or similar engagements within Part D of the Code (applicable from 1 January 2014) therefore continue to be applicable until further notice. The 2020 Revised and Restructured ICAS Code of Ethics is however otherwise applicable to Insolvency Practitioners with effect from 1 January 2020.
A series of articles covering the main changes to the Code of Ethics is available on icas.com. Of particular relevance to Insolvency Practitioners are the articles on the structure of the Code, an enhanced conceptual framework, Safeguards, Inducements (including gifts and hospitality) and Documentation.
Out of hours administrator appointments in England and Wales
The Chancellor of the High Court has issued a guidance note clarifying the procedure to be used in the Business & Property Courts regarding the appointment of an administrator when an application is made electronically outside court hours.
Protected Trust Deed inquiry
ICAS has responded to the Scottish Parliament’s Economy, Energy and Fair Work Committee’s call for views as part of its inquiry into Protected Trust Deeds. The call for views followed on from concerns raised during the committee’s recent scrutiny of the Debt Arrangement Scheme (Scotland) Regulations 2019.
An article summarising ICAS’ response has been produced and evidence sessions at the Scottish Parliament held on 14 January, 21 January and 28 January are available to view. Written submissions made by other stakeholders have also been published.
Independent Loan Charge Review
The Independent Loan Charge Review, carried out by Sir Amyas Morse, was published in December 2019. At the same time the government published its response to the Review and HMRC issued guidance.
An article has been produced looking at the Loan Charge Review from an insolvency perspective.
A previous article looks at the Loan Charge from the standpoint of the tax profession. A follow-up article looking at the position of the tax adviser and their clients, where clients have already settled with HMRC, has also been published.
A further reminder that the Scottish Government’s consultation on reforms to bankruptcy law brought about by the Bankruptcy and Debt Advice (Scotland) Act 2014 (BADAS) closes on 11 February 2020.
ICAS’ response to the consultation will be published shortly.
DAS information sessions
The AiB hosted two information sessions following the Debt Arrangement Scheme (Scotland) Amendment Regulations 2019 coming into force on 4 November 2019.
The purpose of the sessions was to advise stakeholders of the amendments to the Regulations and eDEN system developments.
The AiB has published a document which contains questions and answers arising from the events.
Insolvency Service newsletter
The latest edition of the Insolvency Service newsletter includes information on how special arrangements were put in place to support Thomas Cook employees following the collapse of the airline, the outcome of the investigation into the collapse of the BHS retail chain and introduces the service’s newly-appointed Chief Executive, Dean Beale.
Donalda Theresa Sweeney in relation to the winding up of West Larkin Limited
A Court of Session case examining the liabilities and rights of co-obligants under rule 7.21 of the Insolvency Rules.
Joseph Alexander Sweeney in relation to the winding up of West Larkin Limited
The same Court of Session case but this time looking at the proper approach of the court to an application under section 167(3) of the Insolvency Act. In this instance seeking to have the Liquidator directed to bring a challenge to the registration of a “notice of interest” by the tenants of an agricultural tenancy to acquire the property.
Yvonne Quinn as Trustee in the sequestrated estate of John O’Boyle against Karen Brennan
The Inner House has upheld the Lord Ordinary’s decision that there is no relevant defence to the pursuer’s challenge to a gratuitous alienation made by the debtor. The Defender sought to argue that repaying the debtor the amount alienated after the debtor had been discharged constituted adequate consideration.
Re C A & T Developments Ltd  EWHC 3455 (Ch)
Following an application under paragraph 81 of Schedule B1, the court found that the appointment of administrators had been motivated by an improper purpose and the purpose of the administration could not be achieved. The court ordered the administration to end and the company to be wound up compulsorily (via Lexology).
Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors  EWHC 54 (Ch)
In this case the Judge held that directors continue to owe the duties in terms of sections 171-177 CA 2006 after a company enters into administration or liquidation. These duties are independent of and run parallel to the duties owed by any appointed office holder.
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