FW: ILA Technical Bulletin: Re Cornercare Limited - repeated notices of intention to appoint administrators

 

 

Andrew Cawkwell

Partner

Watson Burton LLP

_________________________________

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mobile:        +44 (0)7973 502809

_________________________________

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From: Insolvency Lawyers Association [mailto:ila@ilauk.com]
Sent: 27 May 2010 15:42
To: Andrew Cawkwell
Subject: ILA Technical Bulletin: Re Cornercare Limited - repeated notices of intention to appoint administrators

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Re Cornercare Limited: repeated notices of intention to appoint administrators Bulletin No 273

Case: Re Cornercare Limited [2010] EWHC 893 (Ch); (HHJ Purle QC) Synopsis: Where a notice of intention to appoint an administrator is filed, but no appointment is made within the prescribed time limit of ten business days, this does not prevent a fresh notice of intention to appoint from being filed and served, resulting in another appointment window during which a further interim moratorium is in place. The Court has adequate powers to deal with any abuse of the interim moratorium in appropriate cases. Topics Covered: Administration; Notice of Intention to Appoint Administrators; Interim Moratorium; Abuse of Process

The Facts The directors of Cornercare Limited (“Cornercare”) had filed a notice of intention to appoint an administrator under paragraph 26 of Sch B1 IA 1986, but an appointment was not made within the prescribed ten business days of filing (paragraph 28(2) of Sch B1 IA 1986). The directors therefore applied to the Court for a declaration that they were at liberty to appoint an administrator out of court, by filing a new notice of intention to appoint in accordance with paragraph 27(1) of Sch B1 IA 1986, or alternatively an administration order. The Decision When the directors made the application, they intended to make an out of court administration appointment, subject to the Court’s blessing on the repeated notice of intention point. However, by the time of the hearing, the original plan had been overtaken by events and the directors instead requested that the Court make an administration order in respect of Cornercare, the SIP16 material having been annexed to the court report in relation to the proposed pre-pack administration sale. HHJ Purle QC obliged and made the administration order, but he also considered the question of repeated notices of intention to appoint. The Judge focussed on the meaning of paragraph 28(2) Sch B1, which states: “An appointment may not be made under paragraph 22 after the period of ten business days beginning with the date on which the notice of intention to appoint is filed under paragraph 27(1).” The issue was whether this paragraph prevented a subsequent appointment by the directors in circumstances where the first notice of intention to appoint had expired without an appointment having been made. The Judge was satisfied that there was a genuine reason why the original appointment by the directors of Cornercare was not made within the prescribed time limit. The reason was explained as funding difficulties for the purchase of premises to which the business was to be moved. The Judge concluded that paragraph 28(2) of Sch B1 IA 1986 (quoted above) refers only to the particular notice of intention to appoint that triggered that notice period. The effect of the paragraph is that no appointment may be made out of time pursuant to that particular notice. In HHJ Purle QC’s view, the paragraph did not prevent a fresh notice of intention to appoint from being filed and served, resulting in a new ten business day appointment window. The contrary interpretation would have the effect of barring forever a second notice of intention to appoint, which would not be practical. The Judge thought that the directors of a company should not be barred from filing a notice of intention to appoint today if, for example ten years ago, they had filed such a notice that had expired without an appointment being made because a white knight had come to the company’s rescue. Although the directors would be able to apply to Court for an administration order, that would presuppose that they knew about (or had not forgotten about) the previous notice of intended appointment. A court application might also take longer, which could be critical in the context of a potential rescue. Although paragraph 23(2) of Sch B1 IA 1986 bars a subsequent appointment of an administrator under paragraph 22 of Sch B1 IA 1986 unless a 12-month period has elapsed since an earlier appointment has ceased, HHJ Purle QC commented that this was not the same as barring forever a second notice of intention to appoint. The Court also dealt with the potential for abuse from filing repeated notices of intention to appoint. Members will be aware that filing a notice of intention to appoint an administrator gives rise to an interim moratorium under paragraph 44(4) of Sch B1 IA 1986, which subsists until either an administrator is appointed, or the ten business day period expires, whichever happens first. The Judge addressed the concern that by filing repeated notices of intention to appoint, directors could engineer consecutive interim moratoria, to the detriment of creditors. He thought that such conduct could amount to abuse, but he considered that the Court already had the power to deal effectively with it, by restraining the lodgement of further notices unless followed by an actual appointment. In extreme cases, the Judge thought that the court could, using its inherent jurisdiction, vacate and remove from the court file an abusive notice of intention to appoint and make a blanket order for permission under paragraph 44 (Interim moratorium) for the remaining period of the illicit moratorium. The potential for abuse was therefore not a reason to prevent a company filing repeated notices of intention to appoint an administrator for genuine reasons where there was no abuse.   Comment Strictly speaking HHJ Purle QC’s comments on the repeated notices point could be considered obiter because, having made an administration order, he did not need to decide the point. However, his opinion is nevertheless useful and will be of at least persuasive authority in future cases where there are genuine reasons for filing more than one notice of intention to appoint. The judgment in this case gives only the briefest description of the circumstances leading to the delay in making the appointment, describing them as “funding difficulties for the purchase of premises to which the business was to be moved”, which suggests that the purchaser of the business was unexpectedly delayed from completing. There is very little discussion of what would amount to a genuine reason for filing more than one notice of intention to appoint, or what would amount to an abuse. This will have to be addressed in subsequent cases. One concern for practitioners is likely to be the extent to which it is permissible to file a notice of intention to appoint when there is a real possibility that the appointment may not be able to be made within the next ten business days. For example, there may be pressure to file a notice to prevent distress or forfeiture by a landlord, or the recovery of retention of title stock by a supplier. The creditor whose self-help remedy is prevented by the interim moratorium might seek to challenge a second notice. Advisers to the directors may wish to recommend that the directors formally consider the effect of second and subsequent notices on creditors, and formally minute detailed reasons for filing the notice, in case any challenge is made. The Judge’s comments on the court’s ability to deal with any abusive repeated notices of intention to appoint will likewise clarify the remedies for any creditor who feels that his interests are being affected by such abusive conduct. In particular, the suggestion that the court has an inherent jurisdiction to remove an abusive notice from the court file may provide the most appropriate way for a challenge to be made. Finally, it is worth pointing out that the case is an example of an administration order involving a pre-pack sale, where the applicants seem to have successfully followed the approach laid down by JJH David Cooke in Re Kayley Vending [2009] EWHC 904 (Ch) (See our bulletin # 210: www.ilauk.org/docs/bulletins/bull210.pdf)   Law Debenture sponsor of the Insolvency Lawyers Association If you wish to be removed from the ILA mailing list and not receive any further updates please click here

------------------------------------------------------------------------------------------------ WATSON BURTON LLP  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ | Tel: +44 (0) 191 244 4444 | Fax: +44 (0) 191 244 4500 1 City Square, Leeds, LS1 2ES | Tel: +44 (0) 113 235 5455 | Fax: +44 (0) 113 235 5450 Floor 29, 30 St Mary Axe, London EC3A 8BF | Tel: +44 (0) 20 7337 8300 | Fax: +44 (0) 20 7337 8350 enquiries@watsonburton.com | www.watsonburton.com  ------------------------------------------------------------------------------------------------ Confidentiality:    This email and its attachments are intended for the above named only and may be confidential. If they have come to you in error you must take no action based on them, nor must you copy or show them to anyone;  please reply to this email and highlight the error. Quality Control:    It is the policy of this firm to review and approve outgoing communications using a process  of tiered authority. Please note that the originator of the above message may differ from the ultimate sender as a  result of this process. Security Warning:    Please note that this e-mail has been created in the knowledge that Internet e-mail is not a  100% secure communications medium. We advise that you understand and observe this lack of security when e-mailing us. Viruses:    Although we have taken steps to ensure that this email and attachments are free from any virus, we  advise that in keeping with good computing practice the recipient should ensure they are actually virus free. Watson Burton LLP is a limited liability partnership, registered in England with registered number OC306105. A list of members' names is available for inspection at the registered office,  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ. ------------------------------------------------------------------------------------------------ Consider the environment.  Please do not print this email unless essential.

FW: Practice Bulletin No 1: Email address for out of court appointments of administrators outside business hours

 

 

Andrew Cawkwell

Partner

Watson Burton LLP

_________________________________

direct dial:  +44 (0)191 244 4338

office no:    +44 (0)191 244 4444

fax no:         +44 (0)191 244 4500

mobile:        +44 (0)7973 502809

_________________________________

Linked in Profile: http://uk.linkedin.com/in/andrewcawkwell1

Join North-East and Yorkshire Company Directors Forum: http://www.linkedin.com/groupRegistration?gid=2287271

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From: Insolvency Lawyers Association [mailto:ila@ilauk.com]
Sent: 26 May 2010 11:28
To: Andrew Cawkwell
Subject: Practice Bulletin No 1: Email address for out of court appointments of administrators outside business hours

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Email address for out of court appointments of administrators outside of business hours Practice Bulletin No 1

Modernisation amendments to Rule 2.19 of the Insolvency Rules 1986, provided by the Insolvency (Amendment) Rules 2010, mean that, for England and Wales, in Administrations commencing on or after 6th April 2010, as an alternative to fax, holders of Qualifying Floating Charges may file a notice of appointment taking place out of court business hours with the court by email. In England and Wales the designated central email address for use in cases commencing on or after 6th April 2010 is mailto:rcjcompanies.orders@hmcourts-service-gsi.gov.uk. In England and Wales the designated central fax number remains 020 7947 6607. No equivalent change has been made to the Rules on out of hours appointments for Scottish administrations. Accordingly, the appropriate form should continue to be faxed directly to the relevant court. The fax numbers can be found on the Scottish Courts website, www.scotcourts.gov.uk. Source: Insolvency Service: Notice to Court of Appointments of Administrators Out of Court Business Hours Law Debenture sponsor of the Insolvency Lawyers Association If you wish to be removed from the ILA mailing list and not receive any further updates please click here

------------------------------------------------------------------------------------------------ WATSON BURTON LLP  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ | Tel: +44 (0) 191 244 4444 | Fax: +44 (0) 191 244 4500 1 City Square, Leeds, LS1 2ES | Tel: +44 (0) 113 235 5455 | Fax: +44 (0) 113 235 5450 Floor 29, 30 St Mary Axe, London EC3A 8BF | Tel: +44 (0) 20 7337 8300 | Fax: +44 (0) 20 7337 8350 enquiries@watsonburton.com | www.watsonburton.com  ------------------------------------------------------------------------------------------------ Confidentiality:    This email and its attachments are intended for the above named only and may be confidential. If they have come to you in error you must take no action based on them, nor must you copy or show them to anyone;  please reply to this email and highlight the error. Quality Control:    It is the policy of this firm to review and approve outgoing communications using a process  of tiered authority. Please note that the originator of the above message may differ from the ultimate sender as a  result of this process. Security Warning:    Please note that this e-mail has been created in the knowledge that Internet e-mail is not a  100% secure communications medium. We advise that you understand and observe this lack of security when e-mailing us. Viruses:    Although we have taken steps to ensure that this email and attachments are free from any virus, we  advise that in keeping with good computing practice the recipient should ensure they are actually virus free. Watson Burton LLP is a limited liability partnership, registered in England with registered number OC306105. A list of members' names is available for inspection at the registered office,  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ. ------------------------------------------------------------------------------------------------ Consider the environment.  Please do not print this email unless essential.

FW: Engaging, up skilling, delivering value and 2010!

 

 

Andrew Cawkwell

Partner

Watson Burton LLP

_________________________________

direct dial:  +44 (0)191 244 4338

office no:    +44 (0)191 244 4444

fax no:         +44 (0)191 244 4500

mobile:        +44 (0)7973 502809

_________________________________

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Join North-East and Yorkshire Company Directors Forum: http://www.linkedin.com/groupRegistration?gid=2287271

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From: Tom Pickering (Icebreaker Executive) [mailto:tom.pickering@icebreakerexecutive.com]
Sent: 20 May 2010 16:48
To: Andrew Cawkwell
Subject: Engaging, up skilling, delivering value and 2010!

"Engaging, up skilling, delivering value and 2010"

Everyone in Britain is aware that the new Government will make tough and very unpopular decisions to address the £160Billion++ budget deficit and the national debt which is expected to reach £1.4Trillion: some of the more likely options are increasing the rate of VAT, reducing public sector pay and pensions, cancelling infrastructure projects, increasing the retirement age and cutting welfare benefits. All of this will unfold in the context of great uncertainty regarding the economy and financial markets here and abroad. Whilst there are some refreshing "seeds of commonsense" appearing; no one can accurately predict what will happen if the Government's cures are not favourably received by the market; exchange rates; tax rises and spending cuts; inflation; interest rates; perceived Chinese bubble bursting, impact of US bank regulations or the debt crisis in America. Indeed, with Britain's unspoken total debt (national and household debt, but not including pensions and off balance sheet liabilities) approaching that of Japan's at almost 300% of GDP, and the rate on 10-year gilts having risen recently to 3.89% (settling at 3.79%), some intelligent 'guesses' can be made about the UKs macro economic climate.

But, even with all these great excuses to do nothing, businesses executives can respond positively and proactively to this very uncertain and potentially risky environment, and that applies particularly to bank, equity investments, new and old.

PE funds and banks need to shift their focus from

1. PLAN A: Market-Led Value Creation i.e. realising financial value through financial engineering or divestment
   To
2. PLAN B: Business-Led Value Creation; creating the underlying ability of a business to deliver sustainable cash flow.  more

How should banks and private equity investors approach and support business executives deliver Plan B?

1. Mindset Change -Private equity investors need to take on board a mindset change from financial engineering to business operations. more
2. Business Value Creation Creating a emerging view of the future in an uncertain environment needs to be at the heart of the new business plan, with innovation, operational excellence, marketing effectiveness, and customer service are some examples where a PE fund can actively steer a management team to focus their efforts. But, enormous agility will also be required to address new market conditions when (not if) they emerge, and experienced globally aware managers must be in place to move in concert with what could be a paradigm shift in business reality. More
3. Business Plan To get investment most businesses need support to define a successful outcome and investor exit. Build a 3-5 year business GROWTH plan, not one which simply cuts cost from a financial perspective to build profit in the short term. Be prepared for lower profits in some industries for the next 3-5 years, or until the market dictates otherwise, and have more importantly develop the agility and low fixed cost base to respond.
4. Management Team; re-assess the current management team and determine whether or not they can deliver in these unstable times and under the new business plan, and able to work with its employees to maximise efficiencies.
5. Measure, Manage, Improve, "If you can manage it you can improve it!" Cash flow management is key; but with full consideration to innovation; one of the fundamental drivers for private equity investors in pursuing certain investments. Business improvement initiatives need to include establishing a well structured team, cash flow management, up-to-date technology, robust and highly flexible business processes, effective revenue generation plan, a constantly re-aligned business marketing/sales strategy that will be successful in a rapidly changing, competitive market place. Three key KPIs to measure are: Cost to Create, Cost to Produce, and Cost to Service, with minimal fixed costs.

The decision is yours as to when to act. On June 22^nd public sector budget cut plan; 30% of shoes and c40% of PCs are bought by the UK public sector, maybe a good time to review and challenge your existing support requirements? A good process is still not enough; you need the means of engagement as well as the mandate. Good ideas and processes are useless without the ability to engage, deliver change and in the process of doing so build value. May sound easy? - have you ever tried engaging with an owner manager in a turnaround - that's why icebreaker take the development of our team, engagement process and evolving own agile model so seriously...

Toby Tarczy, 

Business Executive with Icebreaker Executive Interim Management Limited    E: office@icebreakerexecutive.com  T: 0207 193 5518.

Our findings are taken from an article written by Toby Tarczy and Gerald Hogg, "Challenges Facing Private Equity Backed Investments"

"Delivering Results - Transferring Skills and Leaving Legacies"
www.icebreakerexecutive.com       www.smtconsulting.co.uk       www.bridgebr.com

This update is intended to keep our Friends, Business Colleagues and Contacts, both in the UK and further afield up to date. If you do not wish to receive marketing email from Icebreaker Executive Interim Management Limited, please email office@icebreakerexecutive.com with the subject 'Unsubscribe' and we will ensure that you will not receive any further email from us. Please note that this e-mail is for the intended recipient only and you are hereby notified that any forwarding to a third party without the prior agreement of the author is strictly prohibited. Icebreaker Executive Interim Management Limited, Chestnut House, 1 Grove Close, Cranleigh, GU6 7LR, Surrey, UK. Registered in England & Wales with Company No. 06560465

------------------------------------------------------------------------------------------------ WATSON BURTON LLP  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ | Tel: +44 (0) 191 244 4444 | Fax: +44 (0) 191 244 4500 1 City Square, Leeds, LS1 2ES | Tel: +44 (0) 113 235 5455 | Fax: +44 (0) 113 235 5450 Floor 29, 30 St Mary Axe, London EC3A 8BF | Tel: +44 (0) 20 7337 8300 | Fax: +44 (0) 20 7337 8350 enquiries@watsonburton.com | www.watsonburton.com  ------------------------------------------------------------------------------------------------ Confidentiality:    This email and its attachments are intended for the above named only and may be confidential. If they have come to you in error you must take no action based on them, nor must you copy or show them to anyone;  please reply to this email and highlight the error. Quality Control:    It is the policy of this firm to review and approve outgoing communications using a process  of tiered authority. Please note that the originator of the above message may differ from the ultimate sender as a  result of this process. Security Warning:    Please note that this e-mail has been created in the knowledge that Internet e-mail is not a  100% secure communications medium. We advise that you understand and observe this lack of security when e-mailing us. Viruses:    Although we have taken steps to ensure that this email and attachments are free from any virus, we  advise that in keeping with good computing practice the recipient should ensure they are actually virus free. Watson Burton LLP is a limited liability partnership, registered in England with registered number OC306105. A list of members' names is available for inspection at the registered office,  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ. ------------------------------------------------------------------------------------------------ Consider the environment.  Please do not print this email unless essential.

FW: ILA Technical Bulletin: Nortel administration employee claims: to prove or not to prove

 

 

Andrew Cawkwell

Partner

Watson Burton LLP

_________________________________

direct dial:  +44 (0)191 244 4338

office no:    +44 (0)191 244 4444

fax no:         +44 (0)191 244 4500

mobile:        +44 (0)7973 502809

_________________________________

Linked in Profile: http://uk.linkedin.com/in/andrewcawkwell1

Join North-East and Yorkshire Company Directors Forum: http://www.linkedin.com/groupRegistration?gid=2287271

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From: Insolvency Lawyers Association [mailto:ila@ilauk.com]
Sent: 20 May 2010 10:17
To: Andrew Cawkwell
Subject: ILA Technical Bulletin: Nortel administration employee claims: to prove or not to prove

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Nortel administration employee claims: to prove or not to prove Bulletin No 271

Case: In the matter of Nortel Networks UK Ltd (In Administration); (1) Unite The Union (2) McCartney & Others v Nortel Networks UK Ltd (In Administration) [2010] EWHC 826 (Ch) (Mr Justice Norris) Synopsis: Norris J decided that various employee-related claims of a statutory nature for unfair dismissal and discrimination, and of a contractual nature for enhanced redundancy terms were capable of proof in administration. Further, the claims were monetary claims and as such they were not sufficiently exceptional to warrant being given permission for their continuation and the lifting of the moratorium. Topics Covered: Moratorium; Employment claims: protective awards, redundancy selection; unfair dismissal

The Facts In January 2009, Nortel Networks Limited (“Nortel”) and 18 associated companies operating in separate European jurisdictions but with their COMI in the UK went into administration pursuant to a court order, which was subsequently extended in January 2010 for a further 24 months. Many employees were retained to maintain the business and assist with the reorganisation. However, there were also redundancies. Approximately 240 of the redundant former employees from across EU jurisdictions wished to bring employment related claims. This case concerns 37 of them, who were formerly employed at Nortel’s premises in Monkstown, Newtonabbey, Northern Ireland. The administrators refused consent to bring the employment claims, but the Claimants commenced their claims anyway in the Industrial Tribunal in Northern Ireland without the consent of the administrators or the Court. In October 2009, Unite (the union) and the 37 Claimants issued this application in England for permission to continue with the proceedings before the Tribunal. The claims included: Protective awards: for alleged breach of Nortel’s statutory duty to consult union or employee representatives about the proposed redundancies. If the Tribunal exercises its discretion to make a protective award, then the Northern Irish Department of Employment and Learning will guarantee some of the payment, making the payment direct to the employees, and acquiring the right to make a subrogated claim in the administration. Unfair dismissal claims: for an alleged failure to follow a fair procedure in taking the decision to dismiss the Claimants. Any award of compensation for unfair dismissal would be calculated by reference to statutory guidance, and as such the unfair dismissal claims are statutory claims that arise out of circumstances occurring after the date of the administration. Breach of contract claims: for alleged breach of various contractual agreements, including for enhanced redundancy pay and pay in lieu of notice. These are claims at common law in respect of contracts entered into before the administration but where the breach occurred after the administration (when for example the contract was terminated without adequate notice). Expenses Claims: for unpaid work related expenses dating back to 2007. This is a common law claim for an action that had accrued before the administration. Discrimination claims: for alleged discrimination in the redundancy selection process (including on grounds of age, disability, race, political opinion). These claims are in respect of a statutory cause of action where the duty was owed before the administration but the breach occurred after the date of the administration.   The administrators gave consent for the pursuit of the protective award claims. If the protective award claims were successful (and they are being defended), then the Claimants would be entitled to apply to the Government for immediate payment of the statutory element of any award (thereby enabling the employees to receive money relatively quickly but without immediate recourse to assets in the administration). No consent was given in respect of the continuation of the other claims.  The Decision The correct test The Judge held that the relevant test for the four other claims was that set out by Patten J in AES Barry Ltd v TXU Europe Energy [2004]: "…it will be in exceptional cases that the Court gives a creditor whose claim is simply a monetary one, a right by the taking of proceedings to override and pre-empt that statutory machinery." The question for the court to decide was whether the claims of Unite and the employees were exceptional. Exceptional or not? The Claimants submitted that the exceptional case test was satisfied because the employment claims sought to be advanced were not provable in a future liquidation or in the current administration and that it was necessary to obtain permission to bring them and to pursue them to judgment before any provable claim could arise. The basis of the Claimants’ argument was that their claims did not fall within the definition of “debt” contained in r.13.12 IA 1986 and so could not be proved in the administration (r.12.3(1) IA 1986). Next they argued that the moratorium meant that the Claimants presently had no claims at all. If the moratorium were lifted, then there could be a claim, but it would only be a provable debt once there was a judgment, because for all but one of the types of claims in question, the existence of a debt depended upon the exercise of the Court’s discretion to allow the claim and grant the statutory awards. Therefore, they argued, although there could not be a claim in the administration even if judgment was given (because the exercise of the Court’s discretion giving rise to the claim would have occurred after the commencement of the administration), there could be a claim in a subsequent liquidation. The administrators countered that the likely return to unsecured creditors (including the Claimants) was such that the Court plainly ought not to give permission, but should the point arise, the administrators intended to recognise the surviving employees’ claims as capable of proof and so pursuing the claims to judgment was unnecessary. However, in order to assist the Court by opposing argument, the administrators argued that the employees’ claims were in law to be recognised in the administration and would be provable in a liquidation (judgment or not). The administrators asserted that permission should not be given because if it were, permission would have to be extended to all 240 employee claims, and responding to all those claims individually would hinder the progress of the administration, absorb substantial resources and incur significant litigation costs well in excess of the cost of dealing with the same claims by the process of proof in the administration. In addition, as there was unlikely to be any subsequent liquidation, pursuing the claims would be legally without consequence. The Judge agreed with these arguments to a degree but did not find them compelling, in part because they did not take account of the significance of the claims for the Claimants. Not exceptional The Judge held that the Claimants’ argument was wrong. It was not true that because of the moratorium the Claimants presently had no claims at all. Para 43(6) of Sched B1 does not address the existence of the claims but the manner of their enforcement. The effect of the moratorium is that any rights to initiate any form of process to recover under a claim are simply suspended. The underlying claims do not disappear. The Claimants would still have “claims” even if permission was refused, and would have had “claims” even if actions had not been commenced. Their position is the same as that of any trade creditor or unsecured lender. The Judge also rejected the argument that a claim required a judgment to render it provable. The Judge considered that each of the present claims was either a debt or a liability to which the Company was subject at the date of administration, or a debt or liability to which it become subject after the date of the administration by reason of an obligation incurred before that date. Apart from the expenses claim which was an accrued claim at the date of the administration, Norris J decided that all the other claims (unfair dismissal, discrimination, breach of contract) were contingent liabilities to which Nortel was subject at the date of the administration by reason of a statutory or contractual obligation incurred before that date. In doing so, Norris J distinguished a bankruptcy line of cases: Glenister v Rowe [2000] Ch 76, which held that a liability for a costs order was created not under the relevant statute, but by virtue of the costs order itself, because of the discretionary nature of the court’s power. Prior to the costs order itself, there was no liability to pay, contingent or otherwise. So if the costs order is not made before the bankruptcy, it will not give rise to a provable debt. Similar bankruptcy-related decisions can be found in Steele v Birmingham City Council [2005] EWCA Civ 1824 and Casson v Law Society [2009] EWHC 1943 (Admin) (See Bulletin #225: www.ilauk.org/docs/bulletins/bull225.pdf ). By contrast, in Day v Haine [2008] EWCA Civ 626 (see Bulletin #157: www.ilauk.org/docs/bulletins/bull157.pdf ), the Court of Appeal held that a protective award was a contingent liability at the commencement of the insolvency process, both because the liability stemmed from a pre-liquidation breach of obligation imposed by statute and because it was unreal to describe the award as depending on the exercise of a judicial discretion, in the sense that if the criteria were satisfied, the court had no discretion whether to make an award or not. Applying this conclusion to Nortel, Nortel’s liability in respect of the claims under consideration stemmed not from the exercise of any Court’s discretion but from the relevant contractual and statutory obligations to which it was subject by virtue of its status as an employer and the contracts it entered into before the administration. In addition, the Judge considered that the court should incline towards restricting the category of claims that are not provable. In the Glenister, Steele and Casson cases, the consequence of the claims not being provable in bankruptcy was that the claims could still be pursued against the discharged bankrupt as a post-bankruptcy debt. But as a company does not survive its liquidation, if a claim is not provable in the liquidation it is completely irrecoverable. This outcome is not desirable, especially in relation to employees. Having rejected all the Claimants’ arguments and decided that the claims were capable of proof in an administration (to the extent any distribution were made) or any subsequent liquidation, Norris J concluded that the claims were not “exceptional” so as to warrant the grant of permission for their continuation and the lifting of the moratorium.   Comment This judgment is consistent with the reasoning in Day v Haine. It confirms that employee related claims for unfair dismissal (where the employee is not seeking reinstatement, which is usually the case in insolvencies), discrimination and breach of employment contractual terms are capable of proof in administration and liquidation and that claims of this nature, being purely monetary claims, are not sufficiently exceptional to warrant lifting the moratorium. They can fairly be dealt with as part of the ordinary proof of claim process in the insolvency. IPs and their lawyers will welcome the outcome of the case because it promotes the purpose of the administration for the benefit of all creditors by keeping down the costs of dealing with claims. The judgment is also notable because throughout, the parties both ran arguments counter-intuitive to their interests. Demonstrating a glimmer of a sense of irony, the Judge remarked that the parties’ positions resembled a “Wonderland in which [..] Unite the union argued vigorously that its members had no rights and that the Joint Administrators could not be made to pay them anything; whereas the Joint Administrators assumed the role of arguing that they were obliged to recognise the employees’ claims”.    Law Debenture sponsor of the Insolvency Lawyers Association If you wish to be removed from the ILA mailing list and not receive any further updates please click here

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Andrew Cawkwell invites you to join Turnaround Management Association (UK) - North East Region on LinkedIn

LinkedIn From: Andrew Cawkwell Date: 5/19/2010 Subject: Andrew Cawkwell invites you to join Turnaround Management Association (UK) - North East Region on LinkedIn Andrew Cawkwell wrote: Dear All Andrew Cawkwell http://uk.linkedin.com/in/andrewcawkwell1, Corporate Recovery Partner at Watson Burton LLP has recently accepted an invitation from the Turnaround Management Association to become a coordinator of events on its behalf for the North East region for TMA (UK). Andrew's intention is to create a lively and active group of people in this region who are involved in or interested to hear more about the topical issues of the day regarding the business of turning around distressed companies. The group will aim to meet at least once a quarter and aims to deliver an interesting programme of activities and events designed to support CPD requirements and generate wide scale interest. The next event is on 10 June 2010 at 6pm. Venue: Watson Burton LLP's offices at 1 St James' Gate, Newcastle upon Tyne, Tyne and Wear, NE1 4AD. In order to make to attend the event please visit http://www.tma-uk.org/events/ and follow the link to the North East event. If you have any difficulties booking or require any more information then please call me on 07973 502809. Kind Regards Andrew Join Group Don't want to receive email? Adjust your message settings. © 2010, LinkedIn Corporation FW: Venture Investment Course, 20th May From: Emma Ferry [mailto:E.Ferry@financetree.biz] Sent: 19 May 2010 11:38 To: Emma Ferry Subject: Venture Investment Course, 20th May Hi everyone,   I would like to inform you that we still have a few places left on our 20th May, Venture Investment Course. Please see the flyer below for information on course content and the topics covered surrounding investment. If you would like to attend please let me know as soon as you can via email or call me on 0191 270 5131 , as the event takes place tomorrow therefore I will need to provide you with the agenda for the day and directions to the venue.   Kind Regards,   Emma Ferry   THE VENTURE INVESTMENT COURSE                                                                 FREE WORKSHOP FROM FINANCE TREE       Date:           Thursday, 20th May 2010 Venue:       Ward Hadaway Law Firm, Newcastle Time:          9.30am - 4.30pm       Thinking of raising venture capital? Considering starting or growing a company and need investment?   This one day course contains all you need to know to assess whether you and your business have got what it takes to attract your first serious investment… … then how to do it !     Are you ready for investment? This unique opportunity is available to only 12 companies. There is a selection process to help us identify businesses that could benefit most and stand a chance of attracting venture capital investment.   You will learn: • What kind of money is right for you • Assess your real business potential • How to meet investor expectations • The essentials of the Venture capital • How to write a plan for investment • The best way to present your business • The process of raising investment   Discuss your business plans with investors and entrepreneurs Work with us, in full confidence, and discuss your business with seasoned investors and entrepreneurs. We want to work with you and are prepared to invest our time to improve your understanding and chances of attracting investment. Through the day you will gain direct insights into the process and also assess your own potential.   Free to attend… but is there a catch? No catch. It’s free to you and your company as we are prepared to invest our time in the companies we find. We want to find people we can help to raise investment and we will be up front how we do this. Learn, discuss, and decide whether venture capital is the best funding mechanism for you and how you might go about attracting it for your business. This course is not part of any government subsidized programme. We are looking for businesses and entrepreneurs that can attract investment.   Experience counts, our presenters Peter Hiscocks – entrepreneur, Business Angel and Fellow in Entrepreneurship at the Judge Business School, Cambridge University Jonathan Gold – founder of Finance Tree, specialist in concept and seed capital investment David Pope – Head of Corporate Finance at Finance Tree with 12 years of experience at Brewin Dolphin Securities, the UK largest independent private client investment managers   A delegate said of the course..."The course was not good..it was excellent! It was the most interesting day that I have had in years and hopefully I can now put the information to good use. " John Slider, Entrepreneur, ex MD of Samsung Electronics Manufacturing   33 Bellingham Drive Benton Newcastle upon Tyne NE12 9S2 T: 0191 2705131 E          e.ferry@financetree.biz W         www.financetree.biz         Finance Tree run the Finance and Business investment readiness project. The project is supported by ONE North East and the ERDF. See our investment readiness site   www.financeandbusiness.biz       Disclaimer This e-mail is for the exclusive use of the intended recipient(s). If you receive it in error, you should notify the sender, delete it and destroy all copies. This e-mail may contain confidential information and material protected by intellectual property rights and we reserve the right to take action against anyone who misuses it or the information in it. Internet e-mail is not secure. 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Registered Office: Time Central, 32 Gallowgate, Newcastle upon Tyne, Tyne and Wear, NE1 4BF       ------------------------------------------------------------------------------------------------ WATSON BURTON LLP  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ | Tel: +44 (0) 191 244 4444 | Fax: +44 (0) 191 244 4500 1 City Square, Leeds, LS1 2ES | Tel: +44 (0) 113 235 5455 | Fax: +44 (0) 113 235 5450 Floor 29, 30 St Mary Axe, London EC3A 8BF | Tel: +44 (0) 20 7337 8300 | Fax: +44 (0) 20 7337 8350 enquiries@watsonburton.com | www.watsonburton.com  ------------------------------------------------------------------------------------------------ Confidentiality:    This email and its attachments are intended for the above named only and may be confidential. If they have come to you in error you must take no action based on them, nor must you copy or show them to anyone;  please reply to this email and highlight the error. Quality Control:    It is the policy of this firm to review and approve outgoing communications using a process  of tiered authority. Please note that the originator of the above message may differ from the ultimate sender as a  result of this process. Security Warning:    Please note that this e-mail has been created in the knowledge that Internet e-mail is not a  100% secure communications medium. We advise that you understand and observe this lack of security when e-mailing us. Viruses:    Although we have taken steps to ensure that this email and attachments are free from any virus, we  advise that in keeping with good computing practice the recipient should ensure they are actually virus free. Watson Burton LLP is a limited liability partnership, registered in England with registered number OC306105. A list of members' names is available for inspection at the registered office,  1 St James' Gate, Newcastle upon Tyne, NE99 1YQ. ------------------------------------------------------------------------------------------------ Consider the environment.  Please do not print this email unless essential. Subscribe to: Posts (Atom) Join Distress, Insolvency and Turnaround Global Distress, Insolvency and Turnaround Global Linked In Profile Search This Blog Followers Insolvency News - Headlines Loading... Blog Archive ►  2011 (17) ►  August (10) ►  March (5) ►  February (2) ▼  2010 (147) ►  August (9) ►  July (52) ►  June (67) ▼  May (19) FW: ILA Technical Bulletin: Re Cornercare Limited ... FW: Practice Bulletin No 1: Email address for out ... FW: Engaging, up skilling, delivering value and 2010! FW: ILA Technical Bulletin: Nortel administration ... Andrew Cawkwell invites you to join Turnaround Man... 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