La ley de insolvencia del Reino Unido regula las empresas del Reino Unido que no pueden pagar sus deudas. Si bien la ley de quiebras del Reino Unido se refiere a las normas para las personas físicas , el término insolvencia se utiliza generalmente para las empresas constituidas en virtud de la Ley de Sociedades de 2006 . "Insolvencia" significa no poder pagar las deudas. [2] Desde el Informe Cork de 1982, [3]La política moderna de la ley de insolvencia del Reino Unido ha sido intentar rescatar a una empresa que se encuentra en dificultades, minimizar las pérdidas y distribuir de manera justa las cargas entre la comunidad, los empleados, los acreedores y otras partes interesadas que resultan del fracaso empresarial. Si una empresa no puede salvarse, se "liquida", de modo que los activos se venden para reembolsar a los acreedores según su prioridad. Las principales fuentes de derecho incluyen la Ley de Insolvencia de 1986 , las Reglas de Insolvencia de 1986 (reemplazadas en Inglaterra y Gales desde el 6 de abril de 2017 por las Reglas de Insolvencia (Inglaterra y Gales) de 2016 [4] - ver más abajo), la Ley de Descalificación de Directores de Empresas de 1986 , la Ley de Derechos Laborales de 1996 Parte XII, laReglamento concursal (CE) 1346/2000 y jurisprudencia. Numerosas otras leyes, instrumentos estatutarios y casos relacionados con el trabajo , la banca , la propiedad y los conflictos de leyes también configuran el tema.
La ley del Reino Unido otorga la mayor protección a los bancos u otras partes que contratan una garantía mobiliaria . Si un valor es "fijo" sobre un activo en particular, esto da prioridad al pago sobre otros acreedores, incluidos los empleados y la mayoría de las pequeñas empresas que han negociado con la empresa insolvente. Un " cargo flotante ", que no está permitido en muchos países y sigue siendo controvertido en el Reino Unido, puede barrer todos los activos futuros, pero el tenedor está subordinado por ley a una suma limitada de reclamos de salarios y pensiones de los empleados, y alrededor del 20 por ciento. centavo para otros acreedores no garantizados. Las garantías reales deben registrarse públicamente, sobre la base de la teoría de que la transparencia ayudará a los acreedores comerciales a comprender la situación financiera de una empresa antes de contratar. Sin embargo, la ley aún permite " cláusulas de retención de título " y " fideicomisos de cierre seguro " que funcionan como una garantía pero no tienen que estar registrados. Los acreedores garantizados dominan generalmente los procedimientos de insolvencia, porque un titular de carga flotante puede seleccionar al administrador de su elección. Por ley, los administradores deben priorizar el rescate de una empresa y tienen un deber con todos los acreedores. [5] En la práctica, estos deberes rara vez se incumplen, y el resultado más típico es que los activos de una empresa insolvente se venden como una empresa en funcionamiento a un nuevo comprador, que a menudo puede incluir a la administración anterior, pero libre de acreedores. reclamaciones y potencialmente con muchas pérdidas de puestos de trabajo. Otros procedimientos posibles incluyen un " arreglo voluntario ", si las tres cuartas partes de los acreedores pueden aceptar voluntariamente otorgar a la empresa un recorte de deuda, la administración judicial en un número limitado de tipos de empresas y la liquidación en la que los activos de la empresa finalmente se venden. Las tasas de ejecución por parte de los practicantes de la insolvencia siguen siendo bajas, pero en teoría un administrador o liquidador puede solicitar que se cancelen las transacciones con un valor inferior o que se revoquen las preferencias injustas a algunos acreedores. Los directores pueden ser demandados por incumplimiento del deber o descalificados, incluida la negociación negligente de una empresa cuando no podría haber evitado la insolvencia. [6] Los principios básicos del derecho de la insolvencia siguen siendo objeto de importantes controversias, y sus normas muestran un compromiso de opiniones contradictorias.
Historia
Shylock : ¿Qué juicio temeré si no hago mal? Tenéis entre vosotros muchos esclavos comprados, que, como vuestros asnos, perros y mulos, utilizáis en partes abyectas y servil, porque los comprasteis; ¿Te diré que sean libres, cásalos con tus herederos? ¿Por qué sudan bajo cargas? Que se ablanden sus lechos como el tuyo, y que se sazone su paladar con tales viandas? Responderás 'Los esclavos son nuestros'. Así que les respondo: La libra de carne que le exijo, ha sido comprada cara; es mío, y lo tendré. ¡Si me niegas, sigue tu ley! No hay fuerza en los decretos de Venecia .
Estoy a favor del juicio: contesta; lo tendré?W Shakespeare , El mercader de Venecia (1598) Acto IV, escena i
La historia moderna de la ley de insolvencia empresarial en el Reino Unido comenzó con la primera legislación de empresas en 1844. [7] Sin embargo, muchos principios de insolvencia tienen sus raíces en las leyes de quiebras que se remontan a la antigüedad. La regulación de la quiebra era una parte necesaria de todo sistema legal, y se encuentra en el Código de Hammurabi (siglo XVIII a. C.), las Doce Tablas de la República Romana (450 a. C.), el Talmud (200 d. C.) y el Corpus Juris Civilis ( 534 d.C.). [8] Las leyes antiguas usaban una variedad de métodos para distribuir las pérdidas entre los acreedores, y la satisfacción de las deudas generalmente provenía del propio cuerpo del deudor. Un deudor puede ser encarcelado, esclavizado o asesinado o los tres. En Inglaterra, la cláusula 9 de la Carta Magna 1215 estableció las reglas de que las tierras de las personas no serían confiscadas si tuvieran bienes muebles o dinero para pagar sus deudas. [9] La Ley de quiebras de 1542 introdujo el principio moderno de distribución pari passu (es decir, proporcional) de las pérdidas entre los acreedores. Sin embargo, la Ley de 1542 todavía reflejaba la antigua noción de que las personas que no podían pagar sus deudas eran delincuentes y exigían que los deudores fueran encarcelados. [10] La Ley de Transmisiones Fraudulentas de 1571 aseguró que cualquier transacción del deudor con "intención de retrasar, obstaculizar o defraudar a los acreedores y otros de sus acciones justas y legales" sería "clara y totalmente nula". La visión de los quebrados como sujetos a la voluntad total de los acreedores, bien representada por Shylock exigiendo su "libra de carne" en El mercader de Venecia de Shakespeare , comenzó a decaer alrededor del siglo XVII. En la Ley de Quiebras de 1705 , [11] se otorgó al Lord Canciller el poder de librar a las quiebras de tener que pagar todas las deudas, una vez que se hubieran cumplido con la divulgación de todos los activos y se hubieran cumplido varios procedimientos. Sin embargo, la prisión de los deudores era un fin común. Con frecuencia se exigía a los presos que pagaran honorarios a los guardias de la prisión, lo que los endeudaba aún más, podían ser atados con grilletes y cadenas y las condiciones sanitarias eran pésimas. Un escándalo de principios del siglo XVIII estalló después de que el amigo de un diputado conservador muriera en una prisión por deudas, y en febrero de 1729 un Comité de Prisiones informó sobre las pestilentes condiciones. Sin embargo, el esquema legislativo básico y el sentimiento moral siguieron siendo los mismos. En 1769, William Blackstone 's Commentaries on the Laws of England señaló que no era justificable que ninguna persona que no fuera un comerciante "se cargara con deudas de valor considerable". [12] Y a finales de siglo, Lord Kenyon en Fowler v Padget reafirmó el viejo sentimiento de que "la quiebra se considera un delito y una quiebra en las viejas leyes se llama delincuente". [13]
Desde la South Sea Company y el desastre del mercado de valores en 1720, las sociedades de responsabilidad limitada habían sido formalmente prohibidas por la ley. Esto significaba que las personas que comerciaban para ganarse la vida corrían graves riesgos para su vida y su salud si su negocio empeoraba y no podían pagar sus deudas. Sin embargo, con la revolución industrial, la visión de que las empresas eran ineficientes y peligrosas [14] estaba cambiando. Las corporaciones se volvieron cada vez más comunes como empresas para la construcción de canales, compañías de agua y ferrocarriles. Los incorporadores necesitaban, sin embargo, solicitar al Parlamento una ley local . En la práctica, el privilegio de un inversor de limitar su responsabilidad en caso de insolvencia no era accesible al público empresarial en general. Además, la asombrosa depravación de las condiciones en la prisión de deudores hizo que la reforma de la ley de insolvencia fuera uno de los temas más debatidos en la agenda legislativa del siglo XIX. Casi 100 proyectos de ley se presentaron al Parlamento entre 1831 y 1914. [15] El largo proceso de reforma comenzó con la Ley de Deudores Insolventes (Inglaterra) de 1813 . Esto estableció un tribunal especializado para el alivio de los deudores insolventes. Si sus activos no superaban las 20 libras esterlinas, podrían obtener la liberación de la prisión. Para las personas que comerciaban para ganarse la vida, la Ley de Bancarrotas de 1825 permitía a los deudores entablar procedimientos para que se liquidaran sus deudas, sin el permiso de los acreedores. La Ley de cárceles de 1823 envió sacerdotes y puso a los carceleros de la prisión deudores en la nómina del estado, por lo que no reclamaron honorarios a los reclusos. En virtud de la Ley de prisiones de 1835 , se contrató a cinco inspectores de prisiones. La Ley de Deudores Insolventes de 1842 permitió a los no comerciantes iniciar procedimientos de quiebra para el alivio de sus deudas. Sin embargo, las condiciones siguieron siendo objeto de desaprobación social. El novelista Charles Dickens , cuyo propio padre había sido encarcelado en Marshalsea cuando era un niño, ridiculizó la complejidad y la injusticia a través de sus libros, especialmente David Copperfield (1850), Hard Times (1854) y Little Dorrit (1857). Por esta misma época se inició la reforma.
Las dificultades de las personas para ser exoneradas de sus deudas en los procedimientos de quiebra y lo espantoso de la prisión de los deudores hicieron que la introducción de una legislación empresarial moderna y la disponibilidad general de responsabilidad limitada fueran aún más urgentes. El primer paso fue la Ley de Sociedades Anónimas de 1844 , que permitió la creación de empresas mediante el registro en lugar de una Carta Real . Fue acompañado por la Ley de Liquidación de Sociedades Anónimas de 1844 , que preveía un procedimiento separado para poner fin a una empresa y liquidar los activos. Las empresas tenían una personalidad jurídica separada de sus incorporadores, pero solo con la Ley de Responsabilidad Limitada de 1855 los inversores de una empresa estarían generalmente protegidos contra deudas adicionales en caso de insolvencia de una empresa. La Ley de 1855 limitaba la responsabilidad de los inversores a la cantidad que habían invertido, por lo que si alguien compraba acciones de una empresa que incurría en deudas masivas en caso de insolvencia, no se le podía pedir al accionista más de lo que ya había pagado. Por lo tanto, el riesgo de Se redujo la prisión de los deudores . Poco después, se hicieron reformas para todas las personas endeudadas. Se aprobó la Ley de Bancarrotas de 1861 que permite a todas las personas, no solo a los comerciantes, declararse en quiebra. La Ley de Deudores de 1869 finalmente abolió por completo el encarcelamiento por deudas. De modo que el esquema legislativo de este período llegó a parecerse más o menos al derecho moderno. Si bien el principio general seguía siendo pari passu entre los acreedores de la empresa insolvente, las reclamaciones de los gastos de liquidadores y los salarios de los trabajadores tenían prioridad legal sobre otros acreedores no garantizados. [16] Sin embargo, cualquier acreedor que hubiera contratado una garantía mobiliaria sería el primero en la lista de prioridades. Finalización de la protección de insolvencia seguido del Reino Unido Derecho de sociedades 's leading case, Salomon v Un Salomon & Co Ltd . [17] Aquí un zapatero de Whitechapel había incorporado su negocio, pero debido a luchas económicas, se había visto obligado a declararse insolvente. La Ley de Sociedades de 1862 requería un mínimo de siete accionistas, por lo que había registrado a su esposa e hijos como accionistas nominales, a pesar de que jugaban poco o nada en el negocio. El liquidador de la empresa del Sr. Salomon lo demandó para pagar personalmente las deudas pendientes de su empresa, argumentando que debería perder la protección de responsabilidad limitada dado que los otros accionistas no eran verdaderos inversores. Los acreedores de Salomon estaban particularmente agraviados porque el propio Salomon había asumido un cargo flotante , en general, los activos presentes y futuros de la empresa, por lo que sus reclamaciones de deuda contra la empresa tenían prioridad sobre las de ellos. La Cámara de los Lores sostuvo que, aunque la empresa era una empresa unipersonal en esencia, cualquier persona que se registrara debidamente tendría la protección de las Leyes de Sociedades en caso de insolvencia. El caso de Salomon completó efectivamente el proceso de reformas del siglo XIX porque cualquier persona, incluso la empresa más pequeña, podría tener protección contra la indigencia después de la insolvencia empresarial.
Durante el siglo XX, los esfuerzos de reforma se centraron en tres cuestiones principales. El primero se refería al establecimiento de un sistema de prelación justo entre los créditos de diferentes acreedores. Esto se centró principalmente en la capacidad de los acreedores contractuales poderosos, en particular los bancos, para aceptar tomar una garantía real sobre la propiedad de una empresa, dejando a los acreedores no garantizados sin ningún activo restante para satisfacer sus reclamaciones. Inmediatamente después del caso de Salomon y la controversia creada sobre el uso de cargos flotantes , la Ley de Enmienda de Pagos Preferenciales en Quiebras de 1897 ordenó que los acreedores preferenciales (empleados, gastos de liquidador e impuestos en ese momento) también tuvieran prioridad sobre el titular de un cargo flotante (ahora IA 1986 sección 175). En la Ley de Empresas de 2002, otro cambio importante fue la creación de un fondo de reserva para todos los acreedores no garantizados con alrededor del 20 por ciento de los activos sujetos a un cargo flotante. [18] Al mismo tiempo, se eliminó la prioridad de las reclamaciones de los contribuyentes. Desde entonces, el debate sobre una nueva reforma se ha centrado en si el cargo flotante debe abolirse por completo y si se debe tomar un fondo de reserva de las garantías reales fijas . [19] El segundo gran ámbito de reforma era facilitar el rescate de empresas que aún podían ser viables. A raíz del Informe Cork de 1982, [20] la Ley de Insolvencia de 1986 creó el procedimiento administrativo , exigiendo (en papel) que los gerentes de empresas insolventes intentaran rescatar la empresa y actuarían en interés de todos los acreedores. Después de la Ley de Empresas de 2002, esto reemplazó casi por completo las reglas de administración judicial por las que los acreedores garantizados, con un cargo flotante sobre todos los activos, podían administrar una empresa insolvente sin tener en cuenta las reclamaciones de los acreedores no garantizados. El tercer ámbito de la reforma se refería a la rendición de cuentas de las personas que empeoraron o se beneficiaron de las insolvencias. Según lo recomendado por el Informe Cork , la Ley de descalificación de directores de empresas de 1986 significaba que los directores que infringieran las obligaciones legales de la empresa o cometieran fraude podrían no trabajar como directores durante un máximo de 15 años. El artículo 214 de la Ley de Insolvencia de 1986 creó la responsabilidad por comercio ilícito . [21] Si los directores no iniciaban los procedimientos de insolvencia cuando deberían haber sabido que la insolvencia era inevitable, tendrían que pagar las deudas adicionales acumuladas a través de operaciones prolongadas. Además, se ampliaron las disposiciones sobre traspasos fraudulentos, de modo que cualquier transacción con un valor inferior o de otra preferencia (sin mala intención) pudiera evitarse y deshacerse por una empresa insolvente.
La crisis financiera de 2007-2008 , que resultó de una protección financiera insuficiente al consumidor en los EE. UU., Conflictos de interés en la industria de agencias de calificación crediticia y requisitos de transparencia defectuosos en los mercados de derivados , [22] desencadenó un aumento masivo de las insolvencias corporativas. El debate contemporáneo, en particular en el sector bancario, se ha desplazado hacia la prevención de insolvencias, al examinar los salarios excesivos, los conflictos de intereses entre las instituciones de servicios financieros, la adecuación del capital y las causas de la asunción de riesgos excesivos. La Ley Bancaria de 2009 creó un régimen especial de insolvencia para los bancos, denominado régimen especial de resolución, que prevé que los bancos sean absorbidos por el gobierno en circunstancias extremas.
Insolvencia empresarial
Las insolvencias corporativas ocurren porque las empresas se endeudan excesivamente. Según la ley de sociedades del Reino Unido , una empresa es una persona jurídica separada de las personas que han invertido dinero y trabajo en ella, y media en una serie de grupos de interés. [23] Invariablemente, la responsabilidad de los accionistas, directores y empleados se limita al monto de su inversión, por lo que contra los acreedores comerciales no pueden perder más que el dinero que pagaron por las acciones o sus trabajos. Las insolvencias se vuelven intrínsecamente posibles siempre que se crea una relación de crédito y deuda , como suele suceder a través de contratos u otras obligaciones. En la sección de una economía en la que operan mercados competitivos , siempre que sean posibles los excesos, es probable que se produzcan insolvencias. El significado de insolvencia es simplemente la incapacidad de pagar las deudas , aunque la ley aísla otros dos significados principales. En primer lugar, para que un tribunal ordene la liquidación de una empresa (y la venta de sus activos) o la designación de un administrador (para intentar revertir el negocio), o para evitar varias transacciones, se suele aplicar la prueba de flujo de caja : una empresa debe ser incapaz de pagar sus deudas a su vencimiento. En segundo lugar, con el fin de demandar a los directores para compensar a los acreedores, o para que los directores sean descalificados, se debe demostrar que una empresa tiene menos activos generales que pasivos en su balance . Si las deudas no se pueden pagar a todos en su totalidad, los acreedores necesariamente compiten entre sí por una parte de los activos restantes. Por esta razón, un sistema legal de prioridades fija el orden entre diferentes tipos de acreedores para el pago.
Empresas y crédito
Las empresas son personas jurídicas, creadas mediante el registro de una constitución y el pago de una tasa, en Companies House . Como una persona física, una empresa puede incurrir en obligaciones legales y puede tener derechos. Durante su vida, una empresa debe tener una junta directiva, que generalmente contrata empleados. Estas personas representan a la empresa y actúan en su nombre. Pueden usar y ocuparse de la propiedad , hacer contratos , liquidar fideicomisos o tal vez a través de algunos agravios por comisión de infortunios . Una empresa se endeuda regularmente a través de todos estos eventos. Los tres tipos principales de deudas en el comercio son, en primer lugar, las que surgen a través de un instrumento de deuda específico emitido en un mercado (por ejemplo, un bono corporativo o una nota de crédito), en segundo lugar, a través de un crédito de préstamo adelantado a una empresa en condiciones de reembolso (por ejemplo, un préstamo bancario o hipoteca) y, tercero, crédito de venta (por ejemplo, cuando una empresa recibe bienes o servicios pero aún no los ha pagado. [24] Sin embargo, el principio de personalidad jurídica separada significa que, en general, la empresa es la primera "persona" Los agentes de una empresa (directores y empleados) no suelen ser responsables de las obligaciones, a menos que se asuman específicamente. [25] La mayoría de las empresas también tienen responsabilidad limitada para los inversores. En virtud de la Ley de Insolvencia de 1986, artículo 74 2) d ) esto significa que los accionistas no pueden ser demandados en general por las obligaciones que crea una empresa. Este principio generalmente se mantiene dondequiera que surja la deuda debido a un contrato comercial. La Cámara de los Lores confirmó que el "velo corporativo" no se "levantará" en Salomon v A Salomon & Co Ltd . Aquí, un zapatero no era responsable de las deudas de su empresa a pesar de que efectivamente era la única persona que dirigía el negocio y poseía las acciones. [26] En los casos en que surge una deuda por un agravio contra un acreedor no comercial, la responsabilidad limitada deja de ser un problema, porque se puede adeudar un deber de diligencia independientemente. Este fue el caso en Chandler v Cape plc , donde un ex empleado de una empresa subsidiaria insolvente demandó con éxito a la empresa matriz (solvente) por lesiones personales. Cuando a la empresa no le queda dinero y nadie más puede ser demandado, los acreedores pueden hacerse cargo de la gestión de la empresa. Los acreedores suelen nombrar a un administrador concursal para llevar a cabo un procedimiento administrativo (para rescatar a la empresa y pagar a los acreedores) o bien entrar en liquidación (para vender los activos y pagar a los acreedores). Una moratoria entra en vigor para evitar que cualquier acreedor individual haga cumplir un reclamo contra la empresa. de modo que sólo el administrador concursal, bajo la supervisión del tribunal, puede hacer distribuciones a los acreedores.
Las causas del fracaso empresarial, al menos en el segmento de mercado de la economía, comienzan todas con la creación de crédito y deuda . [27] Ocasionalmente, se contraen deudas excesivas a través de la malversación total de los activos de la empresa o el fraude por parte de las personas que dirigen la empresa. [28] A veces también se encuentra una mala gestión negligente, que se considera que infringe el deber de cuidado. [29] Con mayor frecuencia, las empresas se declaran insolventes debido a retrasos en los pagos. Otro negocio en el que la empresa dependía para obtener crédito o suministros también podría estar en dificultades financieras, y una serie de quiebras podría ser parte de una depresión macroeconómica más amplia . [30] Periódicamente, las insolvencias se producen debido a cambios de tecnología que desactualizan las líneas de negocio. Sin embargo, con mayor frecuencia, las empresas se ven obligadas a declararse en insolvencia simplemente porque están fuera de competencia. En una economía organizada en torno a la competencia de mercado , y donde la competencia presupone perdedores o contempla excesos, las insolvencias necesariamente ocurren. [31] La variedad de causas de quiebra empresarial significa que la ley requiere diferentes respuestas a los problemas particulares, y esto se refleja en el significado legal de la insolvencia.
Significado de insolvencia
El significado de la insolvencia es importante para el tipo de norma jurídica. En términos generales, la insolvencia ha dependido, desde la primera legislación, de la imposibilidad de pagar las deudas. [32] El concepto está incorporado en el artículo 122 (1) (f) de la Ley de Insolvencia de 1986 , que establece que un tribunal puede conceder una solicitud de liquidación de una empresa si "la empresa no puede pagar sus deudas". Sin embargo, a esta frase general se le dan definiciones particulares en función de las reglas para las que la insolvencia es relevante. En primer lugar, la prueba del " flujo de caja " para la insolvencia representada en el artículo 123 (1) (e) es que una empresa es insolvente si "la empresa no puede pagar sus deudas a su vencimiento". Ésta es la prueba principal que se utiliza para la mayoría de las reglas. Orienta a un tribunal a la hora de otorgar una orden de liquidación o designa a un administrador. [33] La prueba del flujo de efectivo también guía a un tribunal a la hora de declarar que las transacciones de una empresa deben evitarse porque estaban infravaloradas, constituían una preferencia ilegal o creaban un cargo flotante por consideración insuficiente. [34] Se dice que la prueba del flujo de efectivo se basa en una "visión comercial" de la insolvencia, en contraposición a una visión legalista rígida. En Re Cheyne Finance plc , [35] que involucra un vehículo de inversión estructurado , Briggs J sostuvo que un tribunal podría tener en cuenta las deudas que serían pagaderas en un futuro próximo, y quizás más adelante, y si era probable que se pagaran esas deudas. Sin embargo, los acreedores pueden tener dificultades para probar en abstracto que una empresa no puede pagar sus deudas a su vencimiento. Por este motivo, el artículo 122 (1) (a) contiene una prueba específica de insolvencia. Si una empresa tiene una deuda indiscutible con un acreedor de más de £ 750, el acreedor envía una demanda por escrito, pero después de tres semanas no se recibe la suma, esto es prueba de que la empresa es insolvente. En Cornhill Insurance plc contra Improvement Services Ltd [36] , Cornhill Insurance adeudaba dinero a una pequeña empresa, la deuda no disputada. Los abogados habían solicitado el pago en repetidas ocasiones, pero ninguno había acudido. Presentaron una petición de liquidación en la Cancillería de la empresa. Los abogados de Cornhill Insurance se apresuraron a obtener una orden judicial, argumentando que no había ninguna evidencia de que su negocio multimillonario tuviera dificultades financieras. Harman J se negó a continuar con la orden judicial señalando que, si la compañía de seguros había "optado" por no pagar, un acreedor también tenía derecho a optar por presentar una petición de liquidación cuando una deuda no está en disputa por motivos sustanciales. [37]
La legislación inglesa establece una distinción entre una " deuda ", que es relevante para la prueba de flujo de efectivo de la insolvencia en virtud del artículo 123 (1) (e), y un " pasivo ", que se vuelve relevante para la segunda prueba de insolvencia del " balance " bajo la sección 123 (2). Una deuda es una suma adeuda y su cantidad es una suma monetaria, que se determina fácilmente mediante la elaboración de una cuenta. Por el contrario, una responsabilidad deberá cuantificarse, como por ejemplo, con una reclamación por incumplimiento de contrato y daños no liquidados . La prueba del balance pregunta si "el valor de los activos de la empresa es menor que el monto de sus pasivos , teniendo en cuenta sus pasivos contingentes y prospectivos". [38] Esto, si los activos totales son menores que los pasivos, también puede tenerse en cuenta a los efectos de las mismas reglas que la prueba de flujo de efectivo (orden de liquidación, administración y transacciones anulables). Pero también es la única prueba utilizada a los efectos de las reglas comerciales ilícitas y la descalificación del director . [39] Estas reglas potencialmente imponen responsabilidad a los directores como respuesta al pago de los acreedores. Esto hace que el balance general sea relevante, porque si los acreedores son todos pagados, la razón para imponer la responsabilidad a los directores (suponiendo que no haya fraude) desaparece. Los pasivos contingentes y prospectivos se refieren a los pasivos de una empresa que surgen cuando ocurre un evento (p. Ej., Definido como una contingencia bajo un contrato de fianza) o pasivos que pueden surgir en el futuro (p. Ej., Probables reclamaciones por víctimas de agravios). El método para calcular activos y pasivos depende de la práctica contable. Estas prácticas pueden variar legítimamente. Sin embargo, el requisito general de la ley es que la contabilidad de los activos y pasivos debe representar una "imagen fiel" de las finanzas de la empresa. [40] El enfoque final de la insolvencia se encuentra en el artículo 183 (3) de la Ley de Derechos Laborales de 1996 , que otorga a los empleados una reclamación por salarios impagos del fondo del seguro nacional . Principalmente a los efectos de la certeza de un evento objetivamente observable, para que surjan estos reclamos, una empresa debe haber entrado en liquidación, se debe designar un administrador judicial o administrador, o se debe aprobar un acuerdo voluntario. La razón principal por la que los empleados tienen acceso al fondo del seguro nacional es que corren un riesgo significativo de que no se paguen sus salarios, dado su lugar en la cola de prioridad legal.
Prioridades
"En una liquidación de una empresa y en una administración (donde no se trata de intentar salvar la empresa o su negocio), el efecto de la legislación concursal (actualmente la Ley de 1986 y el Reglamento de Insolvencia ...), tal como se interpreta y extendido por los tribunales, es que el orden de prelación de pago con cargo al patrimonio de la sociedad es, en términos resumidos, el siguiente:
(1) Acreedores a cargo fijo;
(2) Gastos del procedimiento concursal;
(3) Acreedores preferenciales;
( 4) Acreedores con cargo flotante;
(5) Deudas probables no garantizadas;
(6) Intereses legales;
(7) Pasivos no probables; y
(8) Accionistas ".
Re Nortel GmbH [2013] UKSC 52, [39], Lord Neuberger
Since the Bankruptcy Act 1542 a key principle of insolvency law has been that losses are shared among creditors proportionately. Creditors who fall into the same class will share proportionally in the losses (e.g. each creditor gets 50 pence for each £1 she is owed). However, this pari passu principle only operates among creditors within the strict categories of priority set by the law.[41] First, the law permits creditors making contracts with a company before insolvency to take a security interest over a company's property. If the security refers to some specific asset, the holder of this "fixed charge" may take the asset away free from anybody else's interest to satisfy the debt. If two charges are created over the same property, the charge holder with the first will have the first access. Second, the Insolvency Act 1986 section 176ZA gives special priority to all the fees and expenses of the insolvency practitioner, who carries out an administration or winding up. The practitioner's expenses will include the wages due on any employment contract that the practitioner chooses to adopt.[42] But controversially, the Court of Appeal in Krasner v McMath held this would not include the statutory requirement to pay compensation for a management's failure to consult upon collective redundancies.[43] Third, even if they are not retained, employees' wages up to £800 and sums due into employees' pensions, are to be paid under section 175. Fourth, a certain amount of money must be set aside as a "ring fenced fund" for all creditors without security under section 176A. This is set by statutory instrument as a maximum of £600,000, or 20 per cent of the remaining value, or 50 per cent of the value of anything under £10,000. All these preferential categories (for insolvency practitioners, employees, and a limited amount for unsecured creditors) come in priority to the holder of a floating charge.
Fifth, the holders of a floating charge holders must be paid. Like a fixed charge, a floating charge can be created by a contract with a company before insolvency. Like with a fixed charge, this is usually done in return for a loan from a bank. But unlike a fixed charge, a floating charge need not refer to a specific asset of the company. It can cover the entire business, including a fluctuating body of assets that is traded with day today, or assets that a company will receive in future. The preferential categories were created by statute to prevent secured creditors taking all assets away. This reflected the view that the power of freedom of contract should be limited to protect employees, small businesses or consumers who have unequal bargaining power.[44] After funds are taken away to pay all preferential groups and the holder of a floating charge, the remaining money due to unsecured creditors. In 2001 recovery rates were found to be 53% of one's debt for secured lenders, 35% for preferential creditors but only 7% for unsecured creditors on average.[45] Seventh comes any money due for interest on debts proven in the winding up process. In eighth place is money due to company members under a share redemption contract. Ninth are debts due to members who hold preferential rights. And tenth, ordinary shareholders, have the right to residual assets.
The priority system is reinforced by a line of case law, whose principle is to ensure that creditors cannot contract out of the statutory regime. This is sometimes referred to as the "anti-deprivation rule". The general principle, according to the Mellish LJ in Re Jeavons, ex parte Mackay[47] is that "a person cannot make it a part of his contract that, in the event of bankruptcy, he is then to get some additional advantage which prevents the property being distributed under the bankruptcy laws." So in that case, Jeavons made a contract to give Brown & Co an armour plates patent, and in return Jeavons would get royalties. Jeavons also got a loan from Brown & Co. They agreed half the royalties would pay off the loan, but if Jeavons went insolvent, Brown & Co would not have to pay any royalties. The Court of Appeal held half the royalties would still need to be paid, because this was a special right for Brown & Co that only arose upon insolvency. In a case where a creditor is owed money by an insolvent company, but also the creditor itself owes a sum to the company, Forster v Wilson[48] held that the creditor may set-off the debt, and only needs to pay the difference. The creditor does not have to pay all its debts to the company, and then wait with other unsecured creditors for an unlikely repayment. However, this depends on the sums for set-off actually being in the creditors' possession. In British Eagle International Air Lines Ltd v Compaigne Nationale Air France,[49] a group of airlines, through the International Air Transport Association had a netting system to deal with all the expenses they incurred to one another efficiently. All paid into a common fund, and then at the end of each month, the sums were settled at once. British Eagle went insolvent and was a debtor overall to the scheme, but Air France owed it money. Air France claimed it should not have to pay British Eagle, was bound to pay into the netting scheme, and have the sums cleared there. The House of Lords said this would have the effect of evading the insolvency regime. It did not matter that the dominant purpose of the IATA scheme was for good business reasons. It was nevertheless void. Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Lehman Brothers Special Financing Inc observed that the general principle consists of two subrules — the anti-deprivation rule (formerly known as "fraud upon the bankruptcy law") and the pari passu rule, which are addressed to different mischiefs — and held that, in borderline cases, a commercially sensible transaction entered into in good faith should not be held to infringe the first rule. All these anti-avoidance rules are, however, subject to the very large exception that creditors remain able to jump up the priority queue, through the creation of a security interest.
Préstamos garantizados
While UK insolvency law fixes a priority regime, and within each class of creditor distribution of assets is proportional or pari passu, creditors can "jump up" the priority ladder through contracts. A contract for a security interest, which is traditionally conceptualised as creating a proprietary right that is enforceable against third parties, will generally allow the secured creditor to take assets away, free from competing claims of other creditors if the company cannot service its debts. This is the first and foremost function of a security interest: to elevate the creditor's place in the insolvency queue. A second function of security is to allow the creditor to trace the value in an asset through different people, should the property be wrongfully disposed of. Third, security assists independent, out-of-court enforcement for debt repayment (subject to the statutory moratorium on insolvency), and so provides a lever against which the secured lender can push for control's over the company's management.[50] However, given the adverse distributional impact between creditors, the economic effect of secured lending is a negative externality against non-adjusting creditors.[51] With an ostensibly private contract between a secured lender and a company, assets that would be available to other creditors are diminished without their consent and without them being privy to the bargain. Nevertheless, security interests are commonly argued to facilitate the raising of capital and hence economic development, which is argued to indirectly benefits all creditors.[52] UK law has, so far, struck a compromise approach of enforcing all "fixed" or "specific" security interests, but only partially enforcing floating charges that cover a range of assets that a company trades with. The holders of a floating charge take subject to preferential creditors and a "ring fenced fund" for up to a maximum of £600,000 reserved for paying unsecured creditors.[53] The law requires that details of most kinds of security interests are filed on the register of charges kept by Companies House. However this does not include transactions with the same effect of elevating creditors in the priority queue, such as a retention of title clause or a Quistclose trust.[54]
Debentures
In commercial practice the term "debenture" typically refers to the document that evidences a secured debt, although in law the definition may also cover unsecured debts (like any "IOU").[55] The legal definition is relevant for certain tax statutes, so for instance in British India Steam Navigation Co v IRC[56] Lindley J held that a simple "acknowledgement of indebtedness" was a debenture, which meant that a paper on which directors promised to pay the holder £100 in 1882 and 5% interest each half-year was enough, and as a result subject to pay duty under the Stamp Act 1870. The definition depends on the purpose of the statutory provision for which it is used. It matters because debenture holders have the right to company accounts and the director's report,[57] because debenture holders must be recorded on a company register which other debenture holders may inspect,[58] and when issued by a company, debentures are not subject to the rule against "clogs on the equity of redemption". This old equitable rule was a form of common law consumer protection, which held that if a person contracted for a mortgage, they must always have the right to pay off the debt and get full title to their property back. The mortgage agreement could not be turned into a sale to the lender,[59] and one could not contract for a perpetual period for interest repayments. However, because the rule limited on contractual freedom to protect borrowers with weaker bargaining power, it was thought to be inappropriate for companies. In Kreglinger v New Patagonia Meat and Cold Storage Co Ltd[60] the House of Lords held that an agreement by New Patagonia to sell sheepskins exclusively to Kreglinger in return for a £10,000 loan secured by a floating charge would persist for five years even after the principal sum was repaid. The contract to keep buying exclusively was construed to not be a clog on redeeming autonomy from the loan because the rule's purpose was to preclude unconscionable bargains. Subsequently, the clog on the equity of redemption rule as a whole was abolished by what is now section 739 of the Companies Act 2006. In Knightsbridge Estates Trust Ltd v Byrne[61] the House of Lords applied this so that when Knightsbridge took a secured loan of £310,000 from Mr Byrne and contracted to repay interest over 40 years, Knightsbridge could not then argue that the contract should be void. The deal created a debenture under the Act, and so this rule of equity was not applied.
Registration
While all records of all a company's debentures need to be kept by the company, debentures secured by a "charge" must additionally be registered under the Companies Act 2006 section 860 with Companies House,[62] along with any charge on land, negotiable instruments, uncalled shares, book debts and floating charges, among other things. The purpose of registration is chiefly to publicise which creditors take priority, so that creditors can assess a company's risk profile when making lending decisions. The sanction for failure to register is that the charge becomes void, and unenforceable. This does not extinguish the debt itself, but any advantage from priority is lost and the lender will be an unsecured creditor. In National Provincial Bank v Charnley[63] there had been a dispute about which creditor should have priority after Mr Charnley's assets had been seized, with the Bank claiming its charge was first and properly registered. Giving judgment for the bank Atkin LJ held that a charge, which will confer priority, simply arises through a contract, "where in a transaction for value both parties evince an intention that property, existing or future, shall be made available as security for the payment of a debt, and that the creditor shall have a present right to have it made available, there is a charge". This means a charge simply arises by virtue of contractual freedom. Legal and equitable charges are two of four kinds of security created through consent recognised in English law.[64] A legal charge, more usually called a mortgage, is a transfer of legal title to property on condition that when a debt is repaid title will be reconveyed.[65] An equitable charge used to be distinct in that it would not be protected against bona fide purchasers without notice of the interest, but now registration has removed this distinction. In addition the law recognises a pledge, where a person hands over some property in return for a loan,[66] and a possessory lien, where a lender retains property already in their possession for some other reason until a debt is discharged,[67] but these do not require registration.
Fixed and floating charges
While both need to be registered, the distinction between a fixed and a floating charge matters greatly because floating charges are subordinated by the Insolvency Act 1986 to insolvency practitioners' expenses under section 176ZA,[68] preferential creditors (employees' wages up to £800 per person, pension contributions and the EU coal and steel levies) under section 175 and Schedule 6 and unsecured creditors' claims up to a maximum of £600,000 under section 176A. The floating charge was invented as a form of security in the late nineteenth century, as a concept which would apply to the whole of the assets of an undertaking. The leading company law case, Salomon v A Salomon & Co Ltd,[17] exemplified that a floating charge holder (even if it was the director and almost sole shareholder of the company) could enforce their priority ahead of all other persons. As Lord MacNaghten said, "Everybody knows that when there is a winding-up debenture-holders generally step in and sweep off everything; and a great scandal it is." Parliament responded with the Preferential Payments in Bankruptcy Amendment Act 1897, which created a new category of preferential creditors – at the time, employees and the tax authorities – who would be able to collect their debts after fixed charge holders, but before floating charge holders. In interpreting the scope of a floating charge the leading case was Re Yorkshire Woolcombers Association Ltd[69] where a receiver contended an instrument was void because it had not been registered. Romer LJ agreed, and held that the hallmarks of a floating charge were that (1) assets were charged present and future and (2) change in the ordinary course of business, and most importantly (3) until a step is taken by the charge holder "the company may carry on its business in the ordinary way".[70] A floating charge is not, technically speaking, a true security until a date of its "crystallisation", when it metaphorically descends and "fixes" onto the assets in a business' possession at that time.
Businesses, and the banks who had previously enjoyed uncompromised priority for their security, increasingly looked for ways to circumvent the effect of the insolvency legislation's scheme of priorities. A floating charge, for its value to be ascertained, must have "crystallised" into a fixed charge on some particular date, usually set by agreement.[71] Before the date of crystallisation (given the charge merely "floats" over no particular property) there is the possibility that a company could both charge out property to creditors with priority,[72] or that other creditors could set-off claims against property subject to the (uncrystallised) floating charge.[73] Furthermore, other security interests (such as a contractual lien) will take priority to a crystallised floating charge if it arises before in time.[74] But after crystallisation, assets received by the company can be caught by the charge.[75] One way for companies to gain priority with floating charges originally was to stipulate in the charge agreement that the charge would convert from "floating" to "fixed" automatically on some event before the date of insolvency. According to the default rules at common law, floating charges impliedly crystallise when a receiver is appointed, if a business ceases or is sold, if a company is would up, or if under the terms of the debenture provision is made for crystallisation on reasonable notice from the charge holder.[76] However an automatic crystallisation clause would mean that at the time of insolvency – when preferential creditors' claims are determined – there would be no floating charge above which preferential creditors could be elevated. The courts held that it was legitimate for security agreements to have this effect. In Re Brightlife Ltd[77] Brightlife Ltd had contracted with its bank, Norandex, to allow a floating charge to be converted to a fixed charge on notice, and this was done one week before a voluntary winding up resolution. Against the argument that public policy should restrict the events allowing for crystallisation, Hoffmann J held that in his view it was not "open to the courts to restrict the contractual freedom of parties to a floating charge on such grounds." Parliament, however, intervened to state in the Insolvency Act 1986 section 251 that if a charge was created as a floating charge, it would deem to remain a floating charge at the point of insolvency, regardless of whether it had crystallised.
Minority of the Loreburn Committee, Report of the Company Law Amendment Committee (1906) Cd 3052, 28
Especially as automatic crystallisation ceased to make floating charges an effective form of priority, the next step by businesses was to contract for fixed charges over every available specific asset, and then take a floating charge over the remainder. It attempted to do this as well over book debts that a company would collect and trade with. In two early cases the courts approved this practice. In Siebe Gorman & Co Ltd v Barclays Bank Ltd[78] it was said to be done with a stipulation that the charge was "fixed" and the requirement that proceeds be paid into an account held with the lending bank. In Re New Bullas Trading Ltd[79] the Court of Appeal said that a charge could purport to be fixed over uncollected debts, but floating over the proceeds that were collected from the bank's designated account. However the courts overturned these decisions in two leading cases. In Re Brumark Investments Ltd[80] the Privy Council advised that a charge in favour of Westpac bank that purported to separate uncollected debts (where a charge was said to be fixed) and the proceeds (where the charge was said to be floating) could not be deemed separable: the distinction made no commercial sense because the only value in uncollected debts are the proceeds, and so the charge would have to be the same over both.[81] In Re Spectrum Plus Ltd,[82] the House of Lords finally decided that because the hallmark of a floating charge is that a company is free to deal with the charged assets in the ordinary course of business, any charge purported to be "fixed" over book debts kept in any account except one which a bank restricts the use of, must be in substance a floating charge. Lord Scott emphasised that this definition "reflects the mischief that the statutory intervention... was intended to meet and should ensure that preferential creditors continue to enjoy the priority that section 175 of the 1986 Act and its statutory predecessors intended them to have."[83] The decision in Re Spectrum Plus Ltd created a new debate. On the one hand, John Armour argued in response that all categories of preferential would be better off abolished, because in his view businesses would merely be able to contract around the law (even after Re Spectrum Plus Ltd) by arranging loan agreements that have the same effect as security but not in a form caught by the law (giving the examples of invoice discounting or factoring).[84] On the other hand, Roy Goode and Riz Mokal have called for the floating charge simply to be abandoned altogether, in the same way as was recommended by the Minority of the Loreburn Report in 1906.[85]
Equivalents to security
Aside from a contract that creates a security interest to back repayment of a debt, creditors to a company, and particularly trade creditors may deploy two main equivalents security. The effect is to produce proprietary rights which place them ahead of the general body of creditors. First, a trade creditor who sells goods to a company (which may go into insolvency) can contract for a retention of title clause. This means that even though the seller of goods may have passed possession to a buyer, until the price of sale is paid, the seller has never passed property. The company and creditor agree that title to the property is retained by the seller until the date of payment. In the leading case, Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd[86] a Dutch company making aluminium foil stipulated in its contract with Romalpa Aluminium Ltd that when it supplied the foil, ownership would only passed once the price had been paid, and that any products made by Romalpa would be held by them as bailees. When Romalpa went insolvent, another creditor claimed that its floating charge covered the foil and products. The Court of Appeal held, however, that property in the foil had never become part of Romalpa's estate, and so could not be covered by the charge. Furthermore, the clause was not void for want to registration because only assets belonging to the company and then charged needed to be registered. In later cases, the courts have held that if property is mixed during a manufacturing process so that it is no longer identifiable,[87] or if it is sold onto a buyer,[88] then the retention of title clause ceases to have effect. If the property is something that can be mixed (such as oil) and the clause prohibits this, then the seller may retain a percentage share of the mixture as a tenant in common. But if the clause purports to retain title over no more than a part of the property, Re Bond Worth Ltd held that the clause must take effect in equity, and so requires registration.[89] The present requirements in the Companies Act 2006 section 860 continue not to explicitly cover retention of title clauses, in contrast to the registration requirements in the US Uniform Commercial Code article 9. This requires that anything with the same effect as a security interest requires registration, and so covers retention of title provision.
A second main equivalent to a security interest is a "Quistclose trust" named after the case Barclays Bank Ltd v Quistclose Investments Ltd.[90] Here a company named Rolls Razor Ltd had promised to pay a dividend to its shareholders, but had financial difficulty. Already in debt to its bank, Barclays, for £484,000 it agreed to take a loan from Quistclose Investments Ltd for £209,719. This money was deposited in a separate Barclays account, for the purpose of being paid out to shareholders. Unfortunately, Rolls Razor Ltd entered insolvency before the payment was made. Barclays claimed it had a right to set off the Quistclose money against the debts that were due to it, while Quistclose contended the money belonged entirely to it, and could not be used for the satisfaction of other creditors. The House of Lords unanimously held that a trust had been created in favour of Quistclose, and if the purpose of the payment (i.e. to pay the shareholders) failed, then the money would revert to Quistclose's ownership. While Quistclose trust cases are rare, and their theoretical basis has remained controversial (particularly because the trust is for a purpose and so sits uncomfortably with the rule against perpetuities), trusts have also been acknowledged to exist when a company keeps payments by consumers in a separate fund. In Re Kayford Ltd a mail order business, fearing bankruptcy and not wanting pre-payments by its customers to be taken by other creditors, acted on its solicitors' advice and placed their money in a separate bank account. Megarry J held this effectively ensured other creditors would not have access to this cash. Since the Insolvency Act 1986 reforms, it is probable that section 239, which prohibits transactions that desire to give a preference to one creditor over others, would be argued to avoid such an arrangement (if ever a company does in fact seek to prefer its customers in this way). The position, then, would be that while banks and trade creditors may easily protect themselves, consumers, employees and others in a weaker bargaining position have few legal resources to do the same.
Procedimientos
As a company nears insolvency, UK law provides four main procedures by which the company could potentially be rescued or wound down and its assets distributed. First, a company voluntary arrangement,[91] allows the directors of a company to reach an agreement with creditors to potentially accept less repayment in the hope of avoiding a more costly administration or liquidation procedure and less in returns overall. However, only for small private companies is a statutory moratorium on debt collection by secured creditors available. Second, and since the Enterprise Act 2002 the preferred insolvency procedure, a company which is insolvent can go under administration. Here a qualified insolvency practitioner will replace the board of directors and is charged with a public duty of rescuing the company in the interests of all creditors, rescuing the business through a sale, getting a better result for creditors than immediate liquidation, or if nothing can be done effecting an orderly winding up and distribution of assets. Third, administrative receivership is a procedure available for a fixed list of eight kinds of operation (such as public-private partnerships, utility projects and protected railway companies[92]) where the insolvency practitioner is appointed by the holder of a floating charge that covers a company's whole assets. This stems from common law receivership where the insolvency practitioner's primary duty was owed to the creditor that appointed him. After the Insolvency Act 1986 it was increasingly viewed to be unacceptable that one creditor could manage a company when the interests of her creditor might conflict with those holding unsecured or other debts. Fourth, when none of these procedures is used, the business is wound up and a company's assets are to be broken up and sold off, a liquidator is appointed. All procedures must be overseen by a qualified insolvency practitioner.[93] While liquidation remains the most frequent end for an insolvent company, UK law since the Cork Report has aimed to cultivate a "rescue culture" to save companies that could be viable.
Company voluntary arrangement
Because the essential problem of insolvent companies is excessive indebtedness, the Insolvency Act 1986 sections 1 to 7 contain a procedure for companies to ask creditors to reduce the debt they are owed, in the hope that the company may survive. For instance, directors might propose that each creditor accepts 80 per cent of the money owed to each, and to spread repayments out over five years, in return for a commitment to restructure the business' affairs under a new marketing strategy. Under chapter 11 of the US Bankruptcy Code this kind of debt restructuring is usual, and the so-called "cram down" procedure allows a court to approve a plan over the wishes of creditors if they will receive a value equivalent to what they are owed.[95] However, under UK law, the procedure remains predominantly voluntary, except for small companies. A company's directors may instigate a voluntary arrangement with creditors, or if already appointed, an administrator or liquidator can also propose it.[96] Importantly, secured and preferential creditors' entitlements cannot be reduced without their consent.[97] The procedure takes place under the supervision of an insolvency practitioner, to whom the directors will submit a report on the company's finances and a proposal for reducing the debt.
When initially introduced, the CVA procedure was not frequently used because a single creditor could veto the plan, and seek to collect their debts. This changed slightly with the Enterprise Act 2002. Under a new section 1A of the Insolvency Act 1986, small companies may apply for a moratorium on debt collection if it has any two of (1) a turnover under £6.5m (2) under £3.26m on its balance sheet, or (3) fewer than 50 employees.[98] After an arrangement is proposed creditors will have the opportunity to vote on the proposal, and if 75 per cent approve the plan it will bind all creditors.[99] For larger companies, voluntary arrangements remain considerably under-used, particularly given the ability of administrators to be appointed out of court. Still, compared to the individual voluntary arrangement available for people in bankruptcy, company voluntary arrangements are rare.
Administration
After the Cork Report in 1982 a major new objective for UK insolvency law became creating a "rescue culture" for business, as well as ensuring transparency, accountability and collectivity.[100] The hallmark of the rescue culture is the administration procedure in the Insolvency Act 1986, Schedule B1 as updated by the Enterprise Act 2002. Under Schedule B1, paragraph 3 sets the primary objective of the administrator as "rescuing the company as a going concern", or if not usually selling the business, and if this is not possible realising the property to distribute to creditors. Once an administrator is appointed, she will replace the directors.[101] Under paragraph 40 all creditors are precluded by a statutory moratorium from bringing enforcement procedures to recover their debts. This even includes a bar on secured creditors taking and or selling assets subject to security, unless they get the court's permission.[102] The moratorium is fundamental to keeping the business' assets intact and giving the company a "breathing space" for the purpose of a restructure. It also extends to a moratorium on the enforcement of criminal proceedings. So in Environmental Agency v Clark[103] the Court of Appeal held that the Environment Agency needed court approval to bring a prosecution against a polluting company, though in the circumstances leave was granted. Guidance for when leave should be given by the court was elaborated in Re Atlantic Computer Systems plc (No 1).[104] In this case, the company in administration had sublet computers that were owned by a set of banks who wanted to repossess them. Nicholls LJ held leave to collect assets should be given if it would not impede the administration's purpose, but strong weight should be given to the interests of the holder of property rights. Here, the banks were given permission because the costs to the banks were disproportionate to the benefit to the company.[105] The moratorium lasts for one year, but can be extended with the administration.[106]
The duties of an administrator in Schedule B1, paragraph 3 are theoretically meant to be exercised for the benefit of the creditors as a whole.[107] However the administrator's duties on paper lie in tension with how, and by whom, an administrator is appointed. The holder of a floating charge, which covers substantially all of a company's property (typically the company's bank), has an almost absolute right to select the administrator. Under Schedule B1, paragraph 14, it may appoint the administrator directly, and can do so out of court. The company need not be technically insolvent, so long as the terms of the floating charge allow appointment. The directors or the company may also appoint an administrator out of court,[108] but must give five days' notice to any floating charge holder,[109] who may at any point intervene and install his own preferred candidate.[110] The court can, in law, refuse the floating charge holder's choice of administrator because of the 'particular circumstances of the case', though this will be rare. Typically banks wish to avoid the spotlight and any effect on their reputation, and so they suggest that company directors appoint the administrator from their own list.[111] Other creditors may also apply to court for an administrator to be appointed, although once again, the floating charge holder may intervene.[112] In this case, the court will grant the petition for appointment of an administrator only if, first, the company "is or is likely to become unable to pay its debts" (identical to IA 1986 section 123) and "the administration order is reasonably likely to achieve the purpose of administration."[113] In Re Harris Simons Construction Ltd Hoffmann J held that 'likely to achieve the purpose of administration' meant a test lower than balance of probabilities, and more like whether there was a 'real prospect' of success or a 'good arguable case' for it. So here the company was granted an administration order, which led to its major creditor granting funding to continue four building contracts.[114]
Once in place, the first task of an administrator is to make proposals to achieve the administration objectives. These should be given to the registrar and unsecured creditors within 10 weeks, followed by a creditor vote to approve the plans by simple majority.[115] If creditors do not approve the court may make an order as it sees fit.[116] However, before then under Schedule B1, paragraph 59 the administrator can do 'anything necessary or expedient for the management of the affairs, business and property of the company'.[117] In Re Transbus International Ltd Lawrence Collins J made the point that the rules on administration were intended to be "a more flexible, cheaper and comparatively informal alternative to liquidation" and so with regard to doing what is expedient "the fewer applications which need to be made to the court the better."[118] This means that an administrator can sell the whole assets of a company immediately, making the eventual creditors' meeting redundant.[119] Because of this and out of court appointments, since 2002, "pre-packaged administrations" became increasingly popular. Typically the company directors negotiate with their bank, and a prospective administrator, to sell the business to a buyer immediately after entering administration. Often the company's directors are the buyers.[120] The perceived benefits of this practice, originating in the 1980s in the United States,[121] is that a quick sale without hiring lawyers and expending time or business assets through formalities, can be effected to keep the business running and employees in their jobs. The potential downside is that because a deal is already agreed among the controlling interested parties (directors, insolvency practitioners and the major secured creditor) before broader consultation, unsecured creditors are given no voice, and will recover almost none of their debts.[122] In Re Kayley Vending Ltd, which concerned an in-court appointed administrator,[123] HH Judge Cooke held that a court will ensure that applicants for a prepack administration provide enough information for a court to conclude that the scheme is not being used to unduly disadvantage unsecured creditors. Moreover, while the costs of arranging the prepack before entering administration will count for the purpose of administrator's expenses, it is less likely to do so if the business is sold to the former management. Here the sale of a cigarette vending machine business was to the company's competitors, and so the deal was sufficiently "arm's length" to raise no concern. In their conduct of meetings, the Court of Appeal made clear in Revenue and Customs Commissioners v Maxwell that administrators appointed out of court will be scrutinised in the way they treat unsecured creditors. Here the administrator did not treat the Revenue as having sufficient votes against the company's management buyout proposal, but the court substituted its judgment and stated the number of votes allowed should take account of events all the way in the run up to the meeting, including in this case the Revenue's amended claim for unlawful tax deductions to the managers' trust funds and loans to directors.[124]
This wide discretion of the administrator to manage the company is reflected also in paragraph 3(3)-(4), whereby the administrator may choose between which result (whether saving the company, selling the business, or winding down) "he thinks" subjectively is most appropriate. This places an administrator in an analogous position to a company director.[125] Similarly, further binding duties allow a broad scope for the administrator to exercise good business judgment. An administrator is subject to a duty to perform her functions as 'quickly and efficiently as is reasonably practicable',[126] and must also not act so as to 'unfairly harm' a creditor's interests. In Re Charnley Davies Ltd (No 2) the administrator sold the insolvent company's business at an allegedly undervalued price, which creditors alleged breached his duty to not unfairly harm them.[127] Millett J held the standard of care was not breached, and was the same standard of care as in professional negligence cases of an "ordinary, skilled practitioner". He emphasised that courts should not judge decisions which may turn out sub-optimal with the benefit of hindsight. Here the price was the best possible in the circumstances. Further, in Oldham v Kyrris it was held that creditors may not sue administrators directly in their own capacity, because the duty is owed to the company.[128] So a former employee of a Burger King franchise with an equitable charge for £270,000 for unpaid wages could not sue the administrator directly, outside the terms of the statutory standard, unless responsibility had been directly assumed to him.[129]
Receivership
For businesses where floating charges were created before 2003, and in eight types of corporate insolvencies in the Insolvency Act 1986, sections 72B to 72GA, an older procedure of administrative receivership remains available. These companies are capital market investments; public-private partnerships with step in rights; utility projects; urban regeneration projects; large project finance with step in rights;[130] financial market, system and collateral security charges; registered social landlords; and rail and water companies. Until the Enterprise Act 2002, creditors who had contracted for a security interest over a whole company could appoint their own representative to seize and take a company's assets, owing minimal duties to other creditors. Initially this was a right based purely in the common law of property. The Law of Property Act 1925 gave the holder of any mortgage an incidental power to sell the secured property once the power became exercisable. The receiver was appointable and removable only by, and was the sole the agent of, the mortgagee.[131] In companies, secured lenders who had taken a floating charge over all the assets of a company also contracted for the right upon insolvency to manage the business: the appointed person was called a "receiver and manager" or an "administrative receiver".[132] The Insolvency Act 1986 amended the law so as to codify and raise the administrative receiver's duties. All receivers had a duty to keep and show accounts,[133] and administrative receivers had to keep unsecured creditors informed, and file a report at Companies House.[134] By default, he would be personally liable for contracts that he adopted while he ran the business.[135] For employment contracts, he could not contract out of liability, and had to pay wages if he kept employees working for over 14 days.[136] However, the administrative receiver could always be reimbursed for these costs out of the company's assets,[137] and he would have virtually absolute management powers to control the company in the sole interest of the floating charge holder.
The basic duty of the receiver was to realise value for the floating charge holder, although all preferential debts, or those with priority, would have to be paid.[138] For other unsecured creditors, the possibility of recovering money was remote. The floating charge holder owed no duty to other creditors with regard to the timing of the appointment of a receiver, even if it could have an effect on negotiations for refinancing the business.[139] It was accepted that a receiver had a duty to act only for the proper purpose of realising debts, and not for some ulterior motive. In Downsview Nominees Ltd v First City Corp Ltd,[140] a company had given floating charges to two banks (Westpac first, and First City Corp second). The directors, wishing to install a friendly figure in control asked Westpac to assign its floating charge to their friend Mr Russell, who proceeded to run the business with further losses of $500,000, and refused to pass control to First City Corp, even though they offered the company discharge of all the money owed under the first debenture. The Privy Council advised that Mr Russell, as administrative receiver, had acted for an improper purpose by refusing this deal. A further case of breach of duty occurred in Medforth v Blake[141] where the administrative receiver of a pig farm ignored the former owner's advice on how to get discounts on pig food of £1000 a week. As a result, larger debts were run up. Sir Richard Scott VC held this was a breach of an equitable duty of exercising due diligence. However, a more general duty to creditors was tightly constrained, and general liability for professional negligence was denied to exist. In Silven Properties Ltd v Royal Bank of Scotland[142] a receiver of a property business failed to apply for planning permission on houses that could have significantly raised their value, and did not find tenants for the vacant properties, before selling them. It was alleged that the sales were at an undervalue, but the Court of Appeal held that the receiver's power of sale was exercisable without incurring any undue expense. Everything was subordinate to the duty to the receiver to realise a good price.[143] In this respect, an administrator is not capable of disregarding other creditors, at least in law. One of the reasons for the partial abolition of administrative receivership was that after the receiver had performed his task of realising assets for the floating charge holder, very little value was left in the company for other creditors because it appeared to have fewer incentives to efficiently balance all creditors' interests.[144] Ordinarily, once the receiver's work was done, the company would go into liquidation.
Liquidation
Liquidation is the final, most frequent, and most basic insolvency procedure. Since registered companies became available to the investing public, the Joint Stock Companies Winding-Up Act 1844 and all its successors contained a route for a company's life to be brought to an end. The basic purpose of liquidation is to conclude a company's activities and to sell off assets (i.e. "liquidate", turn goods into "liquid assets" or money) to pay creditors, or shareholders if any value remains. Either the company (its shareholders or directors) can initiate the process through a "voluntary liquidation", or the creditors can force it through a "compulsory liquidation". In urgent circumstances, a provisional liquidation order can also be granted if there is a serious threat to dissipation of a company's assets: in this case, a company may not be notified.[145] By contrast, a voluntary liquidation begins if the company's members vote to liquidate with a 75 per cent special resolution.[146] If the directors can make a statutory declaration that the company is solvent, the directors or shareholders remain in control,[147] but if the company is insolvent, the creditors will control the voluntary winding up.[148] Otherwise, a "compulsory liquidation" may be initiated by either the directors, the company, some shareholders or creditors bringing a petition for winding up to the court.[149] In principle, almost any member (this is usually shareholders, but can also be anyone registered on the company's member list) can bring a petition for liquidation to begin, so long as they have held shares for over six months, or there is only one shareholder.[150] In Re Peveril Gold Mines Ltd[151] Lord Lindley MR held that a company could not obstruct a member's right to bring a petition by requiring that two directors consented or the shareholder had over 20 per cent of share capital. A member's right to bring a petition cannot be changed by a company constitution. However, in Re Rica Gold Washing Co[152] the Court of Appeal invented an extra-statutory requirement that a member must have a sufficient amount of money (£75 was insufficient) invested before bringing a petition.[153] For creditors to bring a petition, there must simply be proof that the creditor is owed a debt that is due. In Mann v Goldstein[154] the incorporated hairdressing and wig business, with shops in Pinner and Haverstock Hill, of two married couples broke down in acrimony. Goldstein and his company petitioned for winding up, claiming unpaid directors fees and payment for a wig delivery, but Mann argued that Goldstein had received the fees through ad hoc payments and another company owed money for the wigs. Ungoed Thomas J held the winding-up petition was not the place to decide the debt actually existed, and it would be an abuse of process to continue.[155]
Apart from petitions by the company or creditors, an administrator has the power to move a company into liquidation, carrying out an asset sale, if its attempts at rescue come to an end.[156] If the liquidator is not an administrator, he is appointed by the court usually on the nomination of the majority of creditors.[157] The liquidator can be removed by the same groups.[158] Once in place, the liquidator has the power to do anything set out in sections 160, 165 and Schedule 4 for the purpose of its main duty. This includes bringing legal claims that belonged to the company. This is to realise the value of the company, and distribute the assets. Assets must always be distributed in the order of statutory priority: releasing the claims of fixed security interest holders, paying preferential creditors (the liquidator's expenses, employees and pensions, and the ring fenced fund for unsecured creditors),[159] the floating charge holder, unsecured creditors, deferred debts, and finally shareholders.[160] In the performance of these basic tasks, the liquidator owes its duties to the company, not individual creditors or shareholders.[161] They can be liable for breach of duty by exercising powers for improper purposes (e.g. not distributing money to creditors in the right order,[162]) and may be sued additionally for negligence.[163] As a person in a fiduciary position, he may have no conflict of interest or make secret profits. Nevertheless, liquidators (like administrators and some receivers) can generally be said to have a broad degree of discretion about the conduct of liquidation. They must realise assets to distribute to creditors, and they may attempt to maximise these by bringing new litigation, either to avoid transactions entered into by the insolvent company, or by suing the former directors.
Aumento de activos
If a company has gone into an insolvency procedure, administrators or liquidators should aim to realise the greatest amount in assets to distribute to creditors.[164] The effect is to alter orthodox private law rules regarding consideration, creation of security and limited liability. The freedom to contract for any consideration, adequate or not,[165] is curtailed when transactions are made for an undervalue, or whenever it comes after the presentation of a winding up petition.[166] The freedom to contract for any security interest[167] is also restricted, as a company's attempt to give an undue preference to one creditor over another, particularly a floating charge for no new money, or any charge that is not registered, can be unwound.[168] Since the Cork Report's emphasis on increasing director accountability, practitioners may sue directors by summary procedure for breach of duties, especially negligence or conflicts of interest. Moreover, and encroaching on limited liability and separate personality,[169] a specific, insolvency related claim was created in 1986 named wrongful trading, so if a director failed to put a company into an insolvency procedure, and ran up extra debts, when a reasonable director would have, he can be made liable to contribute to the company's assets. Intentional wrongdoing and fraud is dealt with strictly, but proof of a mens rea is unnecessary in the interest of preventing unjust enrichment of some creditors at others' expense, and to deter wrongdoing.
Voidable transactions
There are three main claims to unwind substantive transactions that could unjustly enrich some creditors' at the expense of others. First, the Insolvency Act 1986 section 127 declares every transaction void which is entered after the presentation of a winding up petition, unless approved by a court. In Re Gray's Inn Construction Co Ltd[170] Buckley LJ held that courts would habitually approve all contracts that were plainly beneficial to a company entered into in good faith in the ordinary course of business. The predominant purpose of the provision is to ensure unsecured creditors are not prejudiced, and the company's assets are not unduly depleted. However, in Re Gray's Inn because a host of transactions honoured by the company's bank, in an overdrawn account, between the presentation and the winding up petition were being granted, this meant unprofitable trading. So, the deals were declared void.[171] In Hollicourt (Contracts) Ltd v Bank of Ireland, the Court of Appeal held that a bank itself which allows overpayments will not be liable to secondarily creditors if transactions are subsequently declared void. It took the view that a bank is not unjustly enriched, despite any fees for its services the bank may receive.[172] Second, under IA 1986 section 238, transactions at an undervalue may be avoided regardless of their purpose, but only up to two years before the onset of insolvency.[173] For example, in Phillips v Brewin Dolphin Bell Lawrie Ltd[174] the liquidators of an insolvent company, AJ Bekhor Ltd, claimed to rescind the transfer of assets to a subsidiary, whose shares were then purchased by the investment management house Brewin Dolphin for £1. The only other consideration given by Brewin Dolphin was the promise to carry out a lease agreement for computers, which itself was likely to be unwound and therefore worthless. The House of Lords held that the total package of connected transactions could be taken into account to decide whether a transaction was undervalued or not, and held that this one was.
The original Fraudulent Conveyances Act 1571[175]
The third action, which has operated since the Fraudulent Conveyances Act 1571, is that transactions entered into by a bankrupt are voidable if they would result in assets otherwise available to creditors becoming unduly depleted or particular creditors becoming unjustly enriched.[176] Initially transactions made only with the intention of depriving creditors of assets, or perverting the priorities for order of distribution were vulnerable, while the modern approach of the Insolvency Act 1986 contains more provisions that unwind transactions simply because their effect is deprivation of assets available to creditors. Reminiscent of the 1571 Act, under the Insolvency Act 1986 section 423, a company may recover assets if they were paid away for "significantly less than the value" of the thing, and this was done "for the purpose of" prejudicing other creditors' interests. In Arbuthnot Leasing International Ltd v Havelet Leasing Ltd (No 2)[177] Scott J held that the motive of the company or its directors was irrelevant, so that even though Havelet Leasing Ltd's lawyers had advised (quite wrongly) that their scheme of starting another company and transferring assets to it would be lawful, because the scheme's purpose was to put the assets out of other creditors' reach it breached section 423.
Voidable preferences
The Insolvency Act 1986 section 238 only catches depletion of a company's total assets, rather than simply preferring one creditor at the expense of others.[178] To deal with this issue, section 239 allows avoidance preferences that entail a "desire to prefer" one creditor over another. This test is hard to fulfill. In Re MC Bacon Ltd, a company gave a floating charge to Natwest bank in return for a continued overdraft as its business declined. Millett J held the company had not desired to prefer the bank. It had no special affection for its bank, and only agreed to the charge to prolong survival of the business.[179] By contrast, in Re Agriplant Services Ltd[180] Jonathan Parker J held it was an unlawful preference for Agriplant Services Ltd to pay £20,000 due on a leasing contract for earth moving equipment to a company. This was mainly because Agriplant's major shareholder Mr Sagar, had guaranteed that Agriplant's liability, and so repayment absolved Mr Sagar's liabilities above other creditors. Similarly in Re Conegrade Ltd,[181] the Lloyd J held that when two directors of a small engineering company caused the company to sell them a property for £125,000, to then be leased back to Conegrade Ltd, the dominant purpose must have been to give them as creditors a preference over others. Thus, it was avoidable.
A stricter regime exists for floating charges under IA 1986 section 245 that could prejudice other creditors in the run up to insolvency. Any floating charge created up to one year before the onset of insolvency is avoidable at the company's instance if new money was not advanced to the company in return. So a company cannot grant a floating charge to a creditor to secure past advances made by that creditor, unless given at least "at the same time". In Re Shoe Lace Ltd Hoffmann J held that £350,000 advanced in April and May was not close enough to a floating charge created in July to be considered "at the same time".[183] The floating charge could not secure those amounts. Because the context of the legislation was a business one, and in view of the fact that floating charges can be registered up to 21 days after their creation, a few months was far too long. Second 245 only rescinds the charge, and not the debt itself, which remains in effect as before. Yet the creditor becomes unsecured and ranks alongside other creditors.[184] Banks operating accounts for companies in overdraft have an advantage in this respect. Re Yeovil Glove Co Ltd[182] held that if the overall level of debt remains the same, before and after a floating charge is created, and if money turns over by payments of the company in and withdrawals out, the bank's continued extension of credit will continually "harden" their floating charge. Although Yeovil Glove Co Ltd was always indebted to the bank before a floating charge was created, and was indebted at the point of insolvency, because it had deposited and withdrawn a greater amount, the bank's floating charge was considered secure.[185] Finally, the Companies Act 2006 section 874 stipulates that any charge, including a floating charge, that is not registered is considered void. This simple provision encourages a transparency of security interests, at least if creditors are in a position to check the register.
Directors' duties
Under the Insolvency Act 1986 section 212,[186] a liquidator or administrator can bring a claim for summary judgment in the company's name to vindicate any breach of duty by a director owed to the company. This means the directors' duties found in the Companies Act 2006 sections 171 to 177, and in particular a director's duty to act within her powers, her duty of care and duty to avoid any possibility of a conflict of interest. "Director" in this sense is given a broad scope and includes de jure directors, who are formally appointed, de facto directors who assume the role of a director without formal appointment, and shadow directors, under whose directors the official directors are accustomed to act.[187] The candidates for de facto or shadow directors are usually banks who become involved in company management to protect their lending, parent companies, or people who attempt to rescue a company (other than insolvency practitioners). In Holland v HMRC a majority of the Supreme Court held that acting as a director of a corporate director cannot make someone a de facto director unless they voluntarily assume responsibility for a subsidiary company.[188] Similarly to be shadow director, according to Millett J in Re Hydrodam (Corby) Ltd[189] it is not enough to simply be on the board of a parent company.
As an emphasis to the standard codified list of duties, and now reflected in the Companies Act 2006 section 172(4), at common law the duty of directors to pay regard to the interests of creditors increases as a company approaches an insolvent state. While ordinarily, a director's duty is to promote the company's success for the members' benefit,[190] in the vicinity of insolvency a director's actions affect the financial interests of the creditor body the greatest.[191]
Because the misfeasance provision reflects causes of action vested in the company, any money recovered under it is held so that it will go to pay off creditors in their ordinary order of priority. In Re Anglo-Austrian Printing & Publishing Union[192] this meant that a liquidator who had successfully sued directors for £7000 had to give up the funds to a group of debenture holders, who had not yet been paid in full, so there is no discretion to apply the assets in favour of unsecured creditors. A potential benefit is that because the causes of action are vested in the company, they may be assigned to third parties, who may prefer to take the risk and reward of pursuing litigation over the liquidator or administrator.[193] These features are the reverse for money recovered through the statutory based causes of action of fraudulent and wrongful trading.
Unlawful trading
Before a company formally enters an insolvency procedure, three main rules regulate directors' behaviour to discourage running up unnecessary debts at creditors' expense. First, directors (whether real, de facto, or shadow directors) will commit a criminal offence if they dishonestly keep the company running to defraud creditors. "Fraudulent trading" under the Insolvency Act 1986 section 213,[194] requires that a director is actually dishonest, under the standard of R v Ghosh:[195] the director must have acted dishonestly by ordinary standards, and must have recognised that.[196] The sum of money a director may have to pay for the offence is not in itself punitive, but rather compensates for the losses incurred in the period when she or he dishonestly kept the company running. In Morphites v Bernasconi[197] Chadwick LJ decided it was not the intention of Parliament to enact a punitive element for damages under section 213 itself. Instead, under the Companies Act 2006 section 993, there is a separate specific offence of fraudulent trading, carrying a fine of up to £10,000.[198] Beyond the directors, anyone who is knowingly party to the fraud will also be liable. Before someone can be an accessory to fraud, there must be an initial finding or allegation that a principal had acted wrongfully.[199] So in Re Augustus Barnett & Son Ltd[200] Hoffmann J struck out a liquidator's suit for fraudulent trading against the Spanish wine manufacturer, Rumasa SA, which was the parent of Barnett & Son, because although it had given a comfort letter for its subsidiary's debts, and although the subsidiary was advised that a fraudulent trading charge may arise, that had not actually been alleged yet. Fraudulent trading depends on "real moral blame" attributable to someone.[201]
By contrast, wrongful trading is a cause of action that arises when directors have acted negligently. The Insolvency Act 1986 section 214 states that directors (including de facto and shadow directors[204]) are culpable for wrongful trading if they continue to trade when "at some time before the commencement of the winding up of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation". To determine whether someone "ought" to have concluded this, a director is judged by the skills one ought to have for their office, and a higher standard if the director has special skills (such as an accountancy qualification). In Re Produce Marketing Consortium Ltd (No 2)[202] two directors presided over the insolvency of a Spanish and Cypriot orange and lemon business. One had experience in bookkeeping. Knox J held that although in small companies procedures and equipment for keeping records will be less than in large companies, under section 214 "certain minimum standards are to be assumed to be attained" like keeping the accounts reasonably accurate. Here the accounts were done late even as debts were mounting. The basic measure of compensation payable by directors for wrongful trading is assessed according to the loss a director creates from the point in time where insolvency was plainly unavoidable. However, the court has the discretion to take into account all appropriate factors. In Re Brian D Pierson (Contractors) Ltd Hazel Williamson QC held that the directors of a golf course business were culpable for wrongful trading, but reduced their contribution by 30 per cent because poor weather had made profitable golf business more difficult than normal.[205]
One limitation of the unlawful trading provisions is that the cause of action vests solely in the liquidator or administrator, as a matter of statute, unlike for a misfeasance proceeding. While both kinds of action can be pursued concurrently,[207] a fraudulent or wrongful trading case may not be assigned to a third party. In Re Oasis Merchandising Services Ltd[208] the company's former directors sought to challenge a wrongful trading claim because the liquidator had sold the right to sue them to a specialist litigation firm, London Wall Claims. The Court of Appeal held that such an assignment contravened the old common law prohibition on champertous causes, or ones which involve a party in litigation for payment when they have no interest. The disadvantage of this approach is that liquidators or administrators may be too cautious to bring claims, when a specialist firm could bring them.
Derecho laboral
In most corporate insolvencies, it is likely that a large number of people's jobs rely on continued business. Accordingly, UK labour law touches corporate insolvencies in three main ways. First, employment contracts cannot be changed except when there are good economic, technical or organisational reasons under the Transfer of Undertakings (Protection of Employment) Regulations 2006. This matters particularly in the case of a sale of a business' assets. Second, special provisions concern the adoption of employees' contracts by an administrator or other insolvency practitioner, but apparently with various limits on the obligations that survive. Third, employees and their pensions have preferential claims above other creditors' rights, and if this is exhausted may claim money from the National Insurance Fund or the Pension Protection Fund.
Often business transfers take place when a company has plunged into an insolvency procedure. If a company enters liquidation, which aims to wind down the business and sell off the assets, TUPER 2006 regulation 8(7) states that the rules on transfer will not apply.[209]
If employees are kept on after an administrator is appointed for more than 14 days, under paragraph 99 the administrator becomes responsible for adopting their contracts. The liability on contracts is limited to "wages and salaries".[210] This includes pay, holiday pay, sick pay and occupational pension contributions, but has been held to not include compensation for unfair dismissal cases,[211] wrongful dismissal,[212] or protective awards[213] for failure to consult the workforce before redundancies.[214] If the business rescue does ultimately fail, then such money due employees achieves the status of "super priority" among different creditors' claims.
Employees wages and pensions have preferential status, but only up to an £800 limit, a figure which has remained unchanged since 1986.[215] Employees having priority among creditors, albeit not above fixed security holders, dates back to 1897,[216] and is justified on the ground that employees are particularly incapable, unlike banks, of diversifying their risk, and forms one of the requirements in the ILO Protection of Workers' Claims (Employer's Insolvency) Convention.[217] Often this limited preference is not enough, and can take a long time to realise. Reflecting the Insolvency Protection Directive[218] under ERA 1996 section 166 any employee[219] may lodge a claim with the National Insurance Fund for outstanding wages. Under ERA 1996 section 182 the amount claimable is the same as that for unfair dismissal (£350 in 2010) for a limit of 8 weeks. If an employee has been unpaid for a longer period, she may choose the most beneficial 8 weeks.[220]
The Pensions Act 2004 governs a separate system for protecting pension claims, through the Pension Protection Fund. This aims to fully insure all pension claims.[221] Together with minimum redundancy payments, the guarantees of wages form a meagre cushion which requires more of a systematic supplementation when people remain unemployed.
- Directive 2008/94/EC of the European Parliament and of the Council of 22 October 2008 on the protection of employees in the event of the insolvency of their employer
- Employment Rights Act 1996 ss 166–170 and 182–190, which allows compensation for up to £400 per week in the event of an employer going insolvent and not being able to pay outstanding wages.
- C-125/97 Regeling v Bestur Van de Bedrifsvereiniging Voor de Metallnijverheid [1999] IRLR 379
- C-278/05 Robins v Secretary of State for Work and Pensions [2007] IRLR 270
Insolvencia internacional
As the business of UK companies becomes increasingly globalised, and a growing number of overseas businesses operate in the UK, multiple proceedings in different countries with different laws can be engaged by one insolvency. To regulate this in the European Union, the Insolvency Regulation (EC) 1346/2000 was passed. It is essentially a conflicts of laws measure, and generally leaves member states free to determine the content of their own insolvency proceedings and priorities. However, it ensures that one jurisdiction will be determined to be the primary jurisdiction, and all others are secondary.
The UK has also implemented the UNCITRAL Model Law on Cross-Border Insolvency pursuant to the Cross-Border Insolvency Regulations 2006.[222]
- Re Olympic Airlines SA [2015] UKSC 27, on Regulation 1346/2000 art 2(h) and a pension fund deficit of £16m, turning on where the insolvency proceedings could take place
- Jetivia SA v Bilta (UK) Limited (in liquidation) [2015] UKSC 23
Teoría
To find a coherent rationale for insolvency law, to develop a set of principles to understand it, and to guide thinking on what insolvency law should be, a large variety of different theories have been developed. Since the 1970s, particularly from the time of the Bankruptcy Reform Act of 1978 in the United States, and since the Insolvency Act 1986 in the UK, two broad strands of thought emerged. The first and very prominent view, stemming primarily from work by Thomas H. Jackson and Douglas Baird is known as the "creditors' bargain model".[223] The authors posited (adapting visibly a methodology from A Theory of Justice (1971) by John Rawls) that if one wished to determine what the best bankruptcy rules were, it could be discovered by imagining that hypothetically all creditors, secured and unsecured, could sit down and reach an agreement about how assets would be distributed. Jackson, Baird and other co-authors argued that the primary (and almost exclusively) good thing that modern insolvency law achieves is to create a collective debt collection mechanism among creditors. Imagining what would happen if the law did not have collective insolvency rules, it was argued there would be significant increase in costs as individual creditors attempted to ensure repayment, namely (1) the costs of uncertainty in racing to court to claim one's entitlement, and so higher, duplicated monitoring costs by each creditor before a company goes insolvency (2) the risk that a company would be dismantled bit by bit, when acting together creditors would agree that a company could be kept or sold as a going concern, and (3) higher administrative costs of collecting debts individually, when a collective procedure would save time and money.[224] Such individual action exemplifies both the economic model of the prisoners' dilemma (because without knowing or trusting what another individual does, everyone can reach worse outcomes for the group) and the tragedy of the commons (because individual action leads to quicker depletion and exhaustion of a common pool of resources, as opposed to collective planning to preserve assets for future use). Hypothetically, all creditors would agree by consent for their mutual benefit to set up a collective procedure. In reality, transaction costs and hold-up problems prevent mutual agreements being made. But then the law should mimic what would have been agreed in absence of such real world costs. Jackson and Baird further argue that hypothetical creditors would also choose pari passu distribution, but also it is "a key assumption that consensually negotiated security interests have aggregate efficiencies". The law protecting security interests should be inviolable, because it increases the amount of credit available to a company, which through the continuation of business indirectly benefits all creditors.[225] Any other groups of creditor, if they lose out from this insolvency model, ought to be protected by labour, tort or social insurance laws outside the scope of insolvency law. Deviating from Jackson and Baird's simplified law of debt collection mechanisms and priority rules would bring undue costs, because it is not what would have been agreed.[226] This would mean that insolvency law should have no requirement that a company should be rescued (unless creditors agree to it) and should have no classes of preferential creditor (except for unlimited security interests).
A comprehensive challenge to Jackson and Baird's theory, which more closely resembles actual legal policy, came initially from Elizabeth Warren. Warren argued that Jackson and Baird's model is dangerously oversimplified, and based on untested hypothetical assertions about behaviour.[227] First, every system of insolvency law must necessarily make choices about how losses are distributed among creditors with multiple interest.[228] Among these diverse interests include weaker creditors, particularly employees, who are less capable than others at diversifying the risks of insolvency. There is a distinct community interest in companies that survive, and no good reason why only creditors with provable proprietary interests in a company's winding up should be taken into account. This means it is reasonable to give preference to more vulnerable creditors, and to expect secured creditors take on some additional risk to ensure businesses survive for the greater good.[229] The Baird and Jackson view essentially amounts to "single-value economic rationality, an excuse to impose a distributional scheme without justifying it, and, incidentally, a way to work in a damn good deal for secured creditors."[230] Additionally, Lucian Bebchuk has argued that the institution of security interests operates as a partially unjustified negative externality against unsecured creditors. It is not clear, argues Bebchuk, that security interests are in fact efficient, and they are capable of subsidising their activities by diverting wealth from unsecured creditors to themselves without any agreement.[231] In the UK, Roy Goode argues that banks usually take security interests, not because they would otherwise charge a higher interest rate (and so increasing credit to businesses for the benefit of all creditors) but because they calculate the market will bear it. The taking of security depends, not on efficiency, but on bargaining power.[232] Riz Mokal, also deeply critical of the creditors' bargain model, suggests that if one were to follow Baird and Jackson's methodology but in a truly value neutral way, one would ask what creditors would hypothetically agree to if they did not know who they were at all (i.e. whether they were voluntary or involuntary creditors, secured or unsecured). This would likely lead to a result where secured credit was not inviolable, and insolvency law could take account of diverse interests, including corporate rescue.[233]
In the UK, the theories underpinning actual insolvency law policy generally stem from the Report of the Review Committee on Insolvency Law and Practice[234] produced by committee chaired by Kenneth Cork in 1982. The central argument of the report was that too many companies were simply left to fail when they could be revived, saved or brought to a close in a more orderly way. Cork advocated that the law should encourage a "rescue culture", to restore companies back to profitability, which would be in the longer term interests of creditors. Moreover, the Report suggested that insolvency law should "recognise that the effects of insolvency are not limited to the private interests of the insolvent and his creditors, but that other interests of society or other groups in society are vitally affected by the insolvency and its outcome."[235] This largely reflected the previous common law position, which rejected debt collection as being the sole aim, and viewed insolvency to be a matter of public interest.[236] The Cork Report was followed by a White Paper in 1984, A Revised Framework for Insolvency Law[237] which led to the Insolvency Act 1986.
Cambios en las Leyes de Insolvencia en 2017
In an attempt to modernise insolvency rules in the UK, on 6 April 2017 The Insolvency Service[238] rolled out extensive changes to the insolvency industry in England and Wales. The updated rules (called the Insolvency Rules (England and Wales) 2016) replaced the Insolvency Rules 1986 and all their 28 subsequent amendments. The changes were developed by working with insolvency professionals and have been approved by the Insolvency Rules Committee. Some of the more notable changes in modernising the laws have been made to reflect modern business practices and make the insolvency process more efficient. Some notable changes include:
- The use of electronic communications to all creditors
- Removing the requirement to hold physical creditors meetings (Creditors can still request meetings)
- Creditors can opt out of further correspondence
- Small dividends are paid by the office holder without requiring creditors to raise a formal claim.[238]
Ver también
- Bankruptcy in the United States and Chapter 11
- Uniform Commercial Code art 9
- UK company law
- UK labour law
- Sole Trader Insolvency (UK)
- Transfer of Undertakings (Protection of Employment) Regulations 2006
- Enterprise Act 2002
- Wrongful trading (s 214 Insolvency Act 1986)
- Factoring (finance) and invoice discounting
Similar programs in other countries
- For similar programs in Australia, and New Zealand, see Administration (law)
- For a similar program in Ireland see Examinership
- For a similar program in Italy see Concordato preventivo
- For similar programs in Canada see Insolvency law of Canada
Notas
- ^ Insolvency Service, 'Statistics Release: Insolvencies in the Fourth Quarter 2012' (1 February 2013)
- ^ Insolvency Act 1986 s 122(1)(f)
- ^ Report of the Review Committee on Insolvency Law and Practice (1982) Cmnd 8558
- ^ SI 2016/1024
- ^ IA 1986 Sch B1, para 3
- ^ Companies Act 2006, ss 170–177, CDDA 1986 s 6 and IA 1986 s 212–214
- ^ See the Joint Stock Companies Act 1844 and the Joint Stock Companies Winding-Up Act 1844.
- ^ See Codex Hammurabi §§115–118; Talmud, Kethuboth, x. 4, 93a.; Corpus Juris Civilis, Institutes, Book ii, I 9, I.
- ^ Magna Carta 1215 cl 9, "Neither we nor our bailiffs shall seize any land or rent for any debt, so long as the chattels of the debtor are sufficient to repay the debt; nor shall the sureties of the debtor be distrained so long as the principal debtor is able to satisfy the debt; and if the principal debtor shall fail to pay the debt, having nothing wherewith to pay it, then the sureties shall answer for the debt; and let them have the lands and rents of the debtor, if they desire them, until they are indemnified for the debt which they have paid for him, unless the principal debtor can show proof that he is discharged thereof as against the said sureties"
- ^ See generally, I Treiman, 'Escaping the Creditor in the Middle Ages' (1927) 43 Law Quarterly Review 230, 233
- ^ 3 Anne, c.17, passed in fact on 19 March 1706
- ^ (1769) vol II no 5, 473
- ^ (1798) 101 ER 1103; 7 Term rep 509
- ^ eg A Smith, The Wealth of Nations (1776) Book V, Ch 1, para.107
- ^ M Lester, Victorian Insolvency (Clarendon 1995)
- ^ The Joint Stock Companies Act 1856 s 104 and then the Companies Act 1862 ss 44, 110, extended liquidators’ priority to all insolvency procedures. The Bankruptcy Act 1869 s 32 gave priority for wages, as well as taxes.
- ^ a b [1897] AC 22
- ^ See IA 1986 s 176A and Insolvency Act 1986 (Prescribed Part) Order 2003 (SI 2003/2097)
- ^ See R Goode, ‘The Case for the Abolition of the Floating Charge’ in J Getzler and J Payne, Company Charges: Spectrum and Beyond (OUP 2006) and LA Bebchuk and JM Fried, ‘The Uneasy Case for the Priority of Secured Claims in Bankruptcy’ (1996) 105 Yale Law Journal 857–934. A proposal for a ring fenced fund of fixed security was made in Germany by the Kommission Für Insolvenzrecht, Erster Bericht der Kommission für Insolvenzrecht (1985)
- ^ Kenneth Cork, Report of the Review Committee on Insolvency Law and Practice (1982) Cmnd 8558
- ^ UKDC News (8 April 2015). "Insolvency Act 1986". Retrieved 17 April 2015.
- ^ See John C. Coffee, ‘What went wrong? An initial inquiry into the causes of the 2008 financial crisis’ (2009) 9(1) Journal of Corporate Law Studies 1
- ^ See generally, R Goode, Principles of Corporate Insolvency Law (2011) 2–16, "values to be protected that go beyond the interests of those with accrued rights... [include] ... the interest of the workforce in preserving its investment of labour, expertise and loyalty to the enterprise, and... that of the community at large, for example, in the continuance of the business or the payment of clean-up costs of pollution."
- ^ See R Goode, Principles of Corporate Insolvency (2011) 1-03.
- ^ See Williams v Natural Life Health Foods Ltd [1998] UKHL 17
- ^ [1897] AC 22; cf DHN Food Distributors Ltd v Tower Hamlets LBC [1976] 1 WLR 852
- ^ See R Goode, Principles of Corporate Insolvency (2011) 1-09, The causes of insolvency.
- ^ eg Malik v BCCI SA [1997] UKHL 23 and Bishopsgate Investment Management Ltd v Homan [1994] EWCA Civ 33
- ^ eg Re Barings plc (No 5) [1999] 1 BCLC 433 and Re D’Jan of London Ltd [1994] 1 BCLC 561
- ^ eg Salomon v A Salomon & Co Ltd [1897] AC 22
- ^ cf JS Mill, Principles of Political Economy (1848) Book IV, ch 6, "I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other's heels, which form the existing type of social life, are the most desirable lot of human kind, or anything but the disagreeable symptoms of one of the phases of industrial progress." J Schumpeter, Capitalism, Socialism and Democracy (1943) Part II, ch 7, 'The Process of Creative Destruction'
- ^ See originally CA 1862 s 80(4). This contrasts to "bankruptcy" which depended on committing an "act of bankruptcy".
- ^ IA 1986, Sch B1, paras 11 and 35(2)
- ^ IA 1986 ss 240(2)(a) and 245(4)(a)
- ^ [2008] BCC 182, [2007] All ER (D) 25
- ^ [1986] 1 WLR 114
- ^ The debt was then paid. See also Taylors Industrial Flooring Ltd v M&H Plant Hire (Manchester) Ltd [1990] BCLC 216 (honest dispute of a debt is not of itself a substantial ground). Goode (2011) 117, notes creditors who seek quick payment will often prefer to press for a summary judgment, or will apply under IA 1986 s 123(1)(e) so they do not have to wait for the 3-week period to expire.
- ^ BNY Corporate Trustees Services Ltd v Eurosail-UK 2007-3BL plc [2013] UKSC 28
- ^ IA 1986 s 214 and CDDA 1986 s 6
- ^ See Companies Act 2006, ss 393 and 464
- ^ See Riz Mokal, 'Priority as Pathology: The Pari Passu Myth' (2001) 60(3) Cambridge Law Journal 581
- ^ cf Re Barleycorn Enterprises Ltd [1970] Ch 465 and Buchler v Talbot [2004] UKHL 9
- ^ [2005] EWCA Civ 1072. An action in tort could be open, however, against the management directly.
- ^ Salomon v A Salomon & Co Ltd [1897] AC 22, per Lord MacNaghten, "Everybody knows that when there is a winding-up debenture-holders generally step in and sweep off everything; and a great scandal it is."
- ^ Association of Business Recovery Professionals’ 9th Survey (2001) 18, noted in Riz Mokal, Corporate Insolvency Law – Theory and Application (OUP 2005) ch 6
- ^ Kethuboth, x. 4, 93a, quoted in L Levinthal, ‘The Early History of Bankruptcy Law’ (1918) 66(5) U of Penn LR 223, 234. To give a simple example, if creditor A is owed 10, B is owed 30 and C is owed 60, and there is only 50 left, A would get 10, B would get 20 and C would get 20.
- ^ (1873) LR 8 Ch App 643
- ^ (1843) 152 ER 1165
- ^ [1975] 1 WLR 758
- ^ See PL Davies, Gower and Davies Principles of Modern Company Law (8th edn Sweet and Maxwell 2009) 1161
- ^ See LA Bebchuk and JM Fried, ‘The Uneasy Case for the Priority of Secured Claims in Bankruptcy’ (1996) 105 Yale Law Journal 857–934
- ^ TH Jackson, ‘Bankruptcy, nonbankruptcy and the creditors’ bargain’ (1982) 91 Yale Law Journal 857, 868
- ^ IA 1986 s 176A reserves 50% of the first £10,000 and 20% of assets above that value, up to a limit of £600,000 for unsecured creditors from assets subject to a floating charge. The consequence is that if a company has assets worth more than £3m under a floating charge, unsecured creditors receive a quickly diminishing percentage at that point.
- ^ Companies Act 2006 ss 860–874
- ^ Companies Act 2006, s 738, and see Levy v Abercorris Slate and Slab Co (1887) 37 Ch D 260, Chitty J, ‘a debenture means a document which either creates a debt or acknowledges it, and any document which fulfils either of these conditions is a "debenture".’
- ^ (1881) 7 QBD 165
- ^ Companies Act 2006 ss 431–432
- ^ Companies Act 2006, ss 744–748 and Companies Act 2006, s 860(7)(c)
- ^ See Vernon v Bethell (1762) 28 ER 838
- ^ [1913] UKHL 1
- ^ [1940] AC 613
- ^ Introduced by the Companies Act 1900 s 14 (followed by CCA 1908 s 93).
- ^ [1924] 1 KB 431
- ^ See generally Re Cosslett Contractors Ltd [1997] EWCA Civ 2229, [1998] Ch 495
- ^ See Law of Property Act 1925 ss 85–86
- ^ e.g. Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, [2004] 1 AC 816
- ^ e.g. Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656
- ^ See also Buchler v Talbot [2004] UKHL 9
- ^ [1903] 2 Ch 284
- ^ Affirmed by the House of Lords on appeal in Illingworth v Houldsworth [1904] AC 355
- ^ Evans v British Granite Quarries Ltd [1910] 2 KB 979, per Buckley LJ
- ^ Re Castell and Brown Ltd [1898] 1 Ch 315. By contrast in Re Benjamin Cope & Sons Ltd [1914] 1 Ch 800 it was held that a floating charge cannot be created over all the same property in priority, because the first in time prevails when equities are equal. Creation of priority is possible if the second floating charge only covers part, Re Automatic Bottle Makers Ltd [1926] Ch 412.
- ^ Biggerstaff v Rowatt's Wharf Ltd [1896] 2 Ch 93
- ^ George Barker Ltd v Eynon [1974] 1 WLR 462, where possession of meat goods subject to a (possessory) lien took place after the crystallisation of a charge, but still took priority because the contract was first in time.
- ^ N W Robbie & Co Ltd v Witney Warehouse Co Ltd [1963] 1 WLR 1324
- ^ See Re Panama, New Zealand and Australian Royal Mail Co (1870) 5 Ch App 318, Re Woodroffes (Musical Instruments) Ltd [1986] Ch 366, Re Real Meat Co Ltd [1996] BCLC 254.
- ^ [1987] 1 Ch 200
- ^ [1979] 2 Lloyd's Rep 142
- ^ [1994] 1 BCLC 485
- ^ [2001] UKPC 28
- ^ [2001] UKPC 28, [46]
- ^ [2005] UKHL 41
- ^ [2005] UKHL 41, [111]
- ^ J Armour, 'Should we redistribute in insolvency?' (2006) EGCI Working Paper
- ^ Roy Goode, 'Is the Law too Favourable to Secured Creditors?' (1983) 8 Canadian Business Law Journal 53, suggesting the law goes too far to promote secured creditors' interests over unsecured creditors. Riz Mokal, Corporate Insolvency Law: Theory and Application (OUP 2005) ch 6
- ^ [1976] 1 WLR 676
- ^ Re Peachdart Ltd [1984] Ch 131
- ^ Sale of Goods Act 1979 s 25(1) and the Factors Act 1889 s 2(1)
- ^ [1980] Ch 228
- ^ [1970] AC 567
- ^ IA 1986 ss 1–7
- ^ See EA 2002 s 249 and IA 1986 ss 72A-72GA.
- ^ See IA 1986 ss 45(2) and 230 (administrative receivers and liquidators) and Sch B1, para 6 (administrators).
- ^ [2004] EWCA Civ 655, [2005] 1 BCLC 66
- ^ See the US Bankruptcy Code §1129(b)(2)
- ^ IA 1986 s 1
- ^ IA 1986 s 4
- ^ IA 1986 s 1A, Sch A1 para 3(2) and Companies Act 2006, s 382(3)
- ^ See Insolvency Rules, SI 1986/1925 Rule 1.19
- ^ See E McKendrick, Goode on Commercial Law (4th edn Penguin 2010) 928 and Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2003] BCC 885, on the "rescue culture".
- ^ IA 1986 Sch B1, para 67
- ^ IA 1986 Sch B1, paras 40–44
- ^ [2001] Ch 57
- ^ [1992] Ch 505
- ^ [1992] Ch 505, 539–540
- ^ IA 1986 Sch B1, para 76
- ^ Also IA 1986 Sch B1, para 5 makes the administrator an officer of the court.
- ^ IA 1986 Sch B1, para 22
- ^ IA 1986 Sch B1, para 25
- ^ IA 1986 Sch B1, para 36
- ^ R Goode, Principles of Corporate Insolvency Law (2011) 389 and 418
- ^ IA 1986 Sch B1, paras 12 and 36
- ^ IA 1986 Sch B1, para 11
- ^ See also Re AA Mutual International Insurance Co Ltd [2004] EWHC 2430, [2005] 2 BCLC 8, Lewison J held the test for debts in para 11(a) is "more probable than not", while for achieving purposes in para 11(b) it was "real prospect".
- ^ IA 1986 Sch B1, paras 49, 51 and 53
- ^ IA 1986 Sch B1, para 55
- ^ IA 1986 Sch B1, paras 60–66 give a list of specific powers, further set out in Schedule 1. Administrators may replace directors, call creditor meetings, apply to court for directions, control company officers, and distribute assets to creditors in accordance with statutory priorities or to fulfil the administration's purpose.
- ^ [2004] EWHC 932, [9], referring to the judgment of Neuberger J in Re T&D Industries plc [2000] BCC 956. See also Royal Trust Bank v Buchler [1989] BCLC 130.
- ^ Part of Naguib Sawiris' telecomms group, the pre-pack administration of a subsidiary of WIND Hellas was approved by Lewison J in Re Hellas Telecommunications (Luxembourg) II SCA [2009] EWHC 3199 (Ch). He remarked a pre-pack will not usually be an abuse of an administrator's powers.
- ^ cf the definition in Institute of Chartered Accountants, Statement of Insolvency Practice 16, known as "SIP 16", para 1
- ^ See generally, V Finch, 'Pre-packaged Administrations: Bargaining in the Shadows of Insolvency or Shadowy Bargains?' [2006] JBL 568, 569
- ^ S Frisby, ‘A Preliminary Analysis of Pre-packaged Administrations: Report to R3—The Association of Business Recovery Professionals’ (London, R3, 2007) 57–58, in 88% of cases, unsecured creditors get nothing, and in 3% of cases they get over 25% of what they are owed. This compares to 83% of business sales where unsecured creditors get nothing.
- ^ [2009] EWHC 904 (Ch), [2009] BCC 578
- ^ [2010] EWCA Civ 1379
- ^ cf Companies Act 2006 s 172, as a matter of UK company law
- ^ IA 1986 Sch B1, para 4
- ^ Or "prejudice" as the statute said at the time, under the former IA 1986 s 27
- ^ See further Hague v Nam Tai Electronics [2008] UKPC 13. The counterpart in UK company law is found in Peskin v Anderson [2001] BCC 87C or Percival v Wright
- ^ [2003] EWCA Civ 1506, [2004] BCC 111
- ^ Feetum v Levy [2006] Ch 585
- ^ Law of Property Act 1925, ss 101 and 109. The mortgagee can take a maximum of 5% of assets in fees.
- ^ See now IA 1986 s 29(2). This is materially identical to a "qualifying floating charge holder" for administration, under IA 1986 Sch B1, para 14.
- ^ Smiths Ltd v Middleton [1979] 3 All ER 842
- ^ IA 1986 s 48
- ^ Parsons v Sovereign Bank of Canada [1913] AC 160 a company must novate before a receiver incurs personal liability.
- ^ IA 1986 s 42(2)-(2D) and Powdrill v Watson [1995] 2 AC 394
- ^ IA 1986 s 44 and Sch 1
- ^ IA 1986 ss 40, 175, 176A, 386 and Sch 6
- ^ Shamji v Johnson Matthey Bankers Ltd [1986] BCLC 278
- ^ [1993] AC 295
- ^ [2000] Ch 86
- ^ [2003] EWCA Civ 1409
- ^ cf R (Glatt) v Sinclair [2011] EWCA Civ 1317, where a duty was admitted when a receiver sold a house, and then an estate agent immediately sold it again for 38% more money.
- ^ Riz Mokal, Corporate Insolvency Law (2005) 212-6, summarising empirical research that administrative receivership consumed an average of around 25% of estate, against 4.7% costs under US Chapter 11, which compares to the UK's current administration procedure
- ^ IA 1986 s 135 and Revenue & Customs v Rochdale Drinks Distributors Ltd [2011] EWCA Civ 1116
- ^ IA 1986 s 84(1)(b)
- ^ IA 1986 ss 89
- ^ IA 1986 ss 90 and 96
- ^ IA 1986 s 124
- ^ IA 1986 s 124(2)
- ^ [1898] 1 Ch 122
- ^ (1879) 11 Ch D 36
- ^ See further Charles Forte Investments Ltd v Amanda [1964] Ch 240. The Jenkins Committee (1962) Cmnd 1749, para 503(h) recommended this restriction be scrapped.
- ^ [1968] 1 WLR 1091
- ^ See also Stonegate Securities Ltd v Gregory [1980] Ch 576, where Mr Gregory's claim for £33,000 for buying shares was contingent on gaining planning permission for a development.
- ^ IA 1986 Sch B1, paras 83–84
- ^ IA 1986 ss 91 (company appoints in solvent voluntary winding up), 100 (creditors appoint in insolvent voluntary winding up) and 139 (court appoints in compulsory winding up on nomination of creditors).
- ^ IA 1986 ss 171–172
- ^ IA 1986 ss 176ZA (insolvency practitioner expenses), 175 (preferential creditors: employees and pensions) and 175A (ring fence fund)
- ^ IA 1986 s 74(2)(f)
- ^ Knowles v Scott [1891] 1 Ch 717, Romer J
- ^ See Re Home and Colonial Insurance Co Ltd [1930] 1 Ch 102 and Pulsford v Devenish [1903] 2 Ch 625, Farwell J.
- ^ Re Windsor Steam Coal Co (1901) Ltd [1928] Ch 609, a liquidator settled a claim when it was liable for nothing.
- ^ a b eg Insolvency Act 1986 Sch B1, para 3(1)(c)
- ^ Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87
- ^ IA 1986 s 238 (transactions at an undervalue) and IA 1986 s 127 (post-winding up transactions.
- ^ National Provincial Bank v Charnley [1924] 1 KB 431
- ^ IA 1986 s 239 (voidable preference), IA 1986 s 245 (voidable floating charge), and Companies Act 2006, s 890 (charges void without registration)
- ^ IA 1986 s 74(2)(d) and Salomon v A Salomon & Co Ltd [1897] AC 22
- ^ [1980] 1 WLR 711
- ^ R Goode, Principles of Corporate Insolvency (2005) 11.128 argues in Re Gray's Inn there was no disposition of company property if at all times the account was overdrawn. So ‘the bank used its own moneys to meet the company's cheques for what were presumably payments to suppliers and other creditors in the normal course of business, so that in relation to such payments the bank became substituted as creditor for the persons to whom they were made’.
- ^ [2000] EWCA Civ 263
- ^ IA 1986 s 240, setting out the "relevant time"
- ^ [2001] UKHL 2, [2001] 1 BCLC 145
- ^ Now the Insolvency Act 1986 section 423.
- ^ See also Alderson v Temple (1768) 96 ER 384, where Lord Mansfield held the Act extended beyond merely "conveyances" to preferences to achieve the policy of equality intended by the law.
- ^ [1990] BCC 36
- ^ See Re MC Bacon Ltd [1990] BCLC 324
- ^ [1990] BCLC 324
- ^ [1997] 2 BCLC 598
- ^ [2002] EWHC 2411 (Ch)
- ^ a b [1965] Ch 148
- ^ [1994] 1 BCLC 111
- ^ Re Parkes Garage (Swadlincote) Ltd [1929] 1 Ch 139
- ^ This follows from the rule in Clayton's case, or Devaynes v Noble (1816) 1 Mer 572
- ^ IA 1986 s 212
- ^ Companies Act 2006, s 251
- ^ [2010] UKSC 51. An analogy is typically drawn to a trustee de son tort.
- ^ [1994] 2 BCLC 180
- ^ See Re Smith & Fawcett Ltd [1942] Ch 304, 306 and Multinational Gas and Petrochemical Co v Multinational Gas and Petrochemical Services Ltd [1983] Ch 258, Dillon LJ held there was no duty to creditors present or future when the company is solvent.
- ^ See Kinsela & Am v Russell Kinsela Pty Ltd (1986) 10 ACLR 395, Winkworth v Edward Baron Development Co Ltd [1986] 1 WLR 1512, West Mercia Safetywear Ltd v Dodd [1988] BCLC 250 and Colin Gwyer & Associates Ltd v London Wharf (Limehouse) Ltd [2003] BCC 885
- ^ [1985] 2 Ch 891
- ^ See Re Oasis Merchandising Services Ltd [1995] 2 BCLC 493
- ^ Introduced by the Companies Act 1948.
- ^ [1982] EWCA Crim 2
- ^ R v Grantham [1984] QB 675, cf Twinsectra Ltd v Yardley [2002] 2 AC 164
- ^ [2003] EWCA Civ 289, [2003] 2 WLR 1521
- ^ Formerly found in the Companies Act 1985 section 458
- ^ cf Royal Brunei Airlines v Tan [1995] UKPC 4
- ^ [1986] BCLC 170
- ^ See Re a Company (No 001418 of 1988) [1990] BCC 526, where Mr Barford, as director, continued paying himself a higher salary as the company continued to run up debts.
- ^ a b [1989] BCLC 520
- ^ IA 1986 s 214
- ^ IA 1986 s 214(7)
- ^ [1999] BCC 26
- ^ Re Oasis Merchandising Services Ltd [1995] 2 BCLC 493
- ^ Re Purpoint Ltd [1991] BCLC 491
- ^ [1995] 2 BCLC 493
- ^ cf Secretary of State for Trade and Industry v Slater [2007] IRLR 928 and Oakland v Wellswood (Yorkshire) Ltd [2009] EWCA Civ 1094, [2010] IRLR 82
- ^ IA 1986 s 19 and Sch B1 para 99
- ^ Re Allders Department Stores Ltd [2005] BCC 289
- ^ Leeds United AFC Ltd [2008] BCC 11
- ^ Bethan Darwin (16 June 2014). "Bethan Darwin on the employment tribunal ruling that Deloitte had failed to sufficiently consult with Comet staff made redundant". WalesOnline. Retrieved 23 June 2014.
- ^ Krasner v McMath [2005] EWCA Civ 1072, [2005] IRLR 995
- ^ Insolvency Proceedings (Monetary Limits) Order 1986 (SI 1986/1996)
- ^ See Salomon v A Salomon & Co Ltd [1897] AC 22 and the Preferential Payments in Bankruptcy Amendment Act 1897 s 2
- ^ ILO Convention No 173 (1992)
- ^ 2008/94/EC, replacing 80/987/EC and 2002/74/EC
- ^ See McMeechan v Secretary of State for Employment [1997] ICR 549, holding an agency worker could claim; Buchan and Ivey v Secretary of State for Trade and Industry [1997] IRLR 80, holding the purpose of the fund did not allow managing directors to claim, but cf Secretary of State for Trade and Industry v Bottrill [2000] EWCA Civ 781, holding a director who was essentially without any autonomy in a group did deserve protection.
- ^ See Mann v Secretary of State for Employment [1999] IRLR 566 and Regeling v Bestuur van de Bedrijfsvereniging voor de Metaalnijverheid (1999) C-125/97, [1999] IRLR 379
- ^ See Robins v Secretary of State for Work and Pensions (2007) C-278/05, [2007] ICR 779, held that 20% insurance was not enough.
- ^ SI 2006/1030)
- ^ See originally, TH Jackson, ‘Bankruptcy, nonbankruptcy and the creditors’ bargain’ (1982) 91 Yale Law Journal 857–907
- ^ (1982) 91 Yale Law Journal 857, 860–867
- ^ (1982) 91 Yale Law Journal 857, 868, footnote 52
- ^ See DG Baird and TH Jackson, ‘Corporate Reorganizations and the Treatment of Diverse Ownership Interests: A Comment on Adequate Protection of Secured Creditors in Bankruptcy’ (1984) 51(1) University of Chicago Law Review 97
- ^ See also, E Warren and JL Westbrook, ‘Contracting Out of Bankruptcy: An Empirical Intervention’ (2005) 118 Harvard Law Review 1197, criticised using theoretical constructs without any attempt to verify by empirical evidence any of the premises. cf RK Rasmussen, ‘Empirically Bankrupt’ (2007) Col Bus LR 179, arguing that the empirically study was fundamentally flawed. Responded to in E Warren and JL Westbrook, ‘The Dialogue Between Theoretical and Empirical Scholarship’ U of Texas Law and Econ Research Paper, No 88; Harvard Public Law Working Paper No 137
- ^ E Warren, ‘Bankruptcy Policy’ (1987) 54 University of Chicago Law Review 775–814, 777, ‘I see bankruptcy as an attempt to reckon with a debtor’s multiple defaults and to distribute the consequences among a number of different actors. Bankruptcy encompasses a number of competing – and sometimes conflicting – values in their distribution. As I see it, no one value dominates, so that bankruptcy policy becomes a composite of factors that bear on a better answer to the question, how shall the losses distributed?’
- ^ (1987) 54 University of Chicago Law Review 775, 790–791
- ^ (1987) 54 University of Chicago Law Review 775, 803
- ^ LA Bebchuk and JM Fried, ‘The Uneasy Case for the Priority of Secured Claims in Bankruptcy’ (1996) 105 Yale Law Journal 857–934
- ^ R Goode, Principles of Corporate Insolvency Law (2011) 2–18, 76–77
- ^ Riz Mokal, ‘The Authentic Consent Model: Contractariansim, Creditors’ Bargain, and Corporate Liquidation’ (2001) 21 Legal Studies 400. See also, Riz Mokal, ‘On Fairness and Efficiency’ (2003) 66 Modern Law Review 452–467
- ^ (1982) Cmnd 8558
- ^ (1982) Cmnd 8558, para 192
- ^ In re Paget [1927] 2 Ch 85, 87–88, per Lord Hanworth MR
- ^ Cmnd 9175 (1984)
- ^ a b Modernised insolvency rules commence in April 2017, "The Insolvency Service", 25 October 2016
Referencias
- Books
- V Finch, Corporate Insolvency Law: Perspectives and Principles (Cambridge University Press 2009)
- R Goode, Principles of Corporate Insolvency Law (2005)
- A Keay and P Walton, Insolvency Law (Longman 2008)
- Riz Mokal, Corporate Insolvency Law – Theory and Application (OUP 2005)
- L Sealy and Sarah Worthington, Company law: Text, Cases and Materials (OUP 2007)
- Articles
- J Armour, 'Should we redistribute in insolvency?' (2006) EGCI Working Paper
- JC Coffee, ‘What went wrong? An initial inquiry into the causes of the 2008 financial crisis’ (2009) 9(1) Journal of Corporate Law Studies 1
- V Finch, ‘Reinvigorating Corporate Rescue’ [2003] Journal of Business Law 527
- RM Goode, 'The Modernisation of Personal Property Security Law' (1984) 100 LQR 234
- L Levinthal, ‘The Early History of Bankruptcy Law’ (1918) 66(5) University of Pennsylvania Law Review 223
- L Levinthal, ‘The Early History of English Bankruptcy’ (1919) 67(1) University of Pennsylvania Law Review 1
- G McCormack, ‘Swelling Corporate Assets’ [2006] Journal of Corporate Law Studies 39
- Riz Mokal, ‘Agency Costs and Wrongful Trading’ (2000) 59 CLJ 335
- F Oditah, 'Assets and the Treatment of Claims in Insolvency' (1992) 108 LQR 459
- I Treiman, 'Escaping the Creditor in the Middle Ages' (1927) 43 Law Quarterly Review 230
- R Schulte, ‘Enforcing Wrongful Trading as a Standard of Conduct for Directors and a Remedy for Creditors: the Special Case of Corporate Insolvency’ (1999) 20 Co Law 80
- Reports
- Loreburn Report (1906)
- K Cork, The Report of the Review Committee on Insolvency Law and Practice (1982) Cmnd 8558
- A Revised Framework for Insolvency Law (1984) Cmnd 9175
enlaces externos
- UK Government Insolvency Service
- Insolvency Practitioners Association website
- Insolvency Rules 1986