Insolvency - January 2010

Reform of the Insolvency Act 1986 and the Insolvency Rules 1986
On 6 January 2010, the Minister for Business and Regulatory Reform made the Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2010. The Order comes into force on 6 April 2010. The key changes made by the Order are:

  • The addition of two sections to the Insolvency Act 1986 which allow for remote attendance at meetings called under the 1986 Act or the Insolvency Rules 1986;
  • The addition of two sections to the 1986 Act allowingliquidators,provisional liquidators,administrators,trustees in bankruptcyand supervisors ofindividual voluntary arrangementsandcompany voluntary arrangementsto publish information to creditors on web-sites;.
  • Including electronic documents within the meaning of "written" documents.

The Order is published on OPI at: www.opsi.gov.uk/si/si2010/uksi_20100018_en_1 

On 8 January 2010, the Insolvency Service published a revised draft of the Insolvency (Amendment) Rules 2010. The Amendment Rules make substantial changes to the 1986 Rules and take effect from 6 April 2010.

Accompanying commentary from the Insolvency Service is available at: Insolvency Service Commentary
The revised draft of the Amendment Rules is available at: Amendment Rules - Draft
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-----------------------------------------------------------------------------------------------------------------------------------------First liquidation of an Open Ended Investment Company
On 26 January 2010, the start of the provisional liquidation of an Open Ended Investment Company (OEIC), with Cameron Gunn acting as temporary liquidator and the full support of the Financial Services Authority (FSA) was announced.

Thanks are due to ReSolve Partners' whose innovative idea has culminated in this development in the insolvency world.

As an unregistered company, the OEIC (known as the Arc European Property Fund) raised £4 million in capital from some 300 UK investors to invest in the European property market. However the fund's investments values have drastically fallen, due in the main to fluctuation in the European property market.

The role of ReSolve is to protect the fund and to retain assets value until early March 2010 when a full liquidation hearing is due to take place, allowing for the process to begin to sell for the benefit of the fund's investors.
Source: Insolvency News
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-----------------------------------------------------------------------------------------------------------------------------------------Insolvencies to rise even after growth returns
On 26 January 2010, a poll of members of R3, the professional body for insolvency practitioners, suggests that more businesses will become insolvent in 2010, despite the UK's emergence from the recession.

With figures expected to rise to in excess of 28,000 for 2010 compared to 22,800 in 2009, it is forecast that insolvencies will continue to rise.  In contrast, statistics published today show the UK emerging from the recession. As the economy recovers, creditors are more likely to put more pressure on debtors.

2009 saw several high profile insolvencies such as Woolworths, Threshers and The Officer's Club.
Source: Financial Director
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