Briefing Corporate Turnaround and

Odds and ends – PPF guidance on pre-packs, schemes of arrangement and review of Bills of Sale

This month’s summary of “also ran” update items forms When looking at whether the court had power to sanction the a fairly eclectic mix, however some useful items can be scheme, it was considered that although the pulled out of them. prevented a company from being wound up in the UK unless its COMI (or an establishment) was present here, the jurisdiction of PPF guidance to Insolvency Practitioners on the courts to sanction schemes did not rely on such transient pre-pack considerations. First up, the Pension Protection Fund’s & Insolvency team issued a Guidance Note on its approach to pre-packaged Accordingly it seems that Schemes will remain the restructuring administrations involving final salary pension schemes in July 2015. tool of choice in larger cases, perhaps even more so considering that the “group coordination” mechanism provided for under the In that note the PPF raises the main concern that pre-packs are revised Insolvency Regulation provides for voluntary opt-in by each used to “dump” pension scheme whilst the business is continued company/jurisdiction involved. by a company either controlled by - or with strong links to – the previous owners or managers of the company. Review of Bills of Sale – a new era for personal security? Particular areas of concern voiced by the PPF are that: (i) the Lastly, many practitioners will be aware that for “chattel” assets pre-pack “pool” recommended by the Graham Review is not (i.e. physical goods outside land, ships and aircraft), the only yet in place, and in any event is not mandatory; (ii) “out of court” form of security registration available to lenders is currently the administrations involve no say on that part of ; and (iii) anachronistic “Bills of Sale” legislation, which provides for highly administrators who go on to become a subsequent prescribed and non-negotiable forms of documents, which have or CVA supervisor lack the independence to objectively review to be periodically registered at the High Court. what has gone before. The upshot is that the is little in the way of effective scrutiny in pre-pack cases. At long last, the Law Commission has announced a consultation paper on reforming bills of sale, which closes on 9 December As a result, the PPF has announced that in all pre-pack cases, it 2015. The suggested outcome, as summarised in the useful will review the extent to which the PPF and creditors have been executive summary document, is that the current system be consulted prior to appointed, and use its voting power to appoint scrapped and replaced by a new “goods mortgage”, with certain a different IP as subsequent liquidator or CVA supervisor where prescribed contents, and a streamlined registration system. Such concerns about lack of PPF engagement exist. developments are to be welcomed and we will continue to watch Practitioners would be well advised to consult the PPF openly and and report on this. early as a result. Should you have any queries about such situations, Clive Pugh of our Pensions team is your best point of contact. Contact Schemes of arrangement – interaction with the For more information on this subject please contact: Insolvency Regulation (or not) The next item is just a quick note that the case of In the matter Patrick Cook of Van Gansewinkel Groep BV and 5 others [2015] EWHC 2151, Partner the High Court has again sanctioned scheme of arrangement for +44(0)117 307 6807 foreign entities, this time for a group comprising five Dutch and [email protected] one Belgium company. In all cases, the companies’ centre of main interests was outside England and Wales, and none of them Richard Clark had an establishment here. The issue of “sufficient connection” Legal Director with the was dealt with through English law +44(0)117 902 6626 governing provisions in the finance documents. [email protected]

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