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26.10.22
In this bulletin, we focus on duties of directors and claims against them in the context of the decision in Re Marylebone Warwick. Olivia Reader assesses the test for solvency and when the duty to consider the interests of creditors is engaged; and Cathryn Butler and Chesley Noone provide an update on the new 2022 Chancery Guide, a reminder on the increase in bankruptcy and liquidation petition deposit fees and an update on the new SDLT rates which came into force on 23 September 2022.
In the recent case of Re Marylebone Warwick Balfour Management Ltd [2022] EWHC 784 (Ch) the Court considered the conduct of the directors of Marylebone Warwick Balfour Management Ltd (the Company) as a result of their involvement in a tax avoidance scheme. The transactions challenged dated back to 2002 and claims were brought against all seven of the Company’s directors, although confidential terms were agreed in a Tomlin Order with four of the directors prior to the hearing. The decision highlights the importance for directors of obtaining professional advice at all relevant and key times; this was ultimately a crucial consideration in the Judge’s decision.
Read our comments on the case here.
In the recent decision of Re Marylebone Warwick, the Court considered the solvency of Marylebone Warwick Balfour Management Ltd and whether the directors had a duty to consider the interests of creditors following assessments from HMRC in respect of unpaid PAYE and NICs having entered into a tax avoidance scheme.
In the recent case of Re Marylebone Warwick the Court addressed issues of limitation for breach of duty claims and considered the applicability of s.32(1)(b) and (2) Limitation Act 1980 where a right of action has been deliberately concealed from an applicant by a respondent.
On 29 July 2022 a new edition of the Chancery Guide was published. This is the first new edition of the guide since 2016 and introduces changes to modernise the court processes and procedures including remote hearings and electronic bundles.
The Guide brings some substantial changes for Insolvency, including the general application guidance contained within Chapters 14 to 16 and the guidance relating to the Insolvency and Companies List in Chapter 21.
On 1 November 2022 the Insolvency Proceedings (Fees) (Amendment) Order 2022 will come into force, increasing the deposit fee required for initiating bankruptcy petitions and winding up petitions.
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