United Kingdom: Insolvency/Bankruptcy

The Court of Appeal has partially reversed a High Court decision in a case examining whether a chargee's appointment of administrators was invalid due to improper purpose, specifically where debt acquisition followed a failed takeover bid. The judgment clarifies the boundaries of Braganza-style rationality duties in secured lending enforcement and explores when the equitable 'proper purpose' doctrine may constrain a creditor's right to appoint administrators under Schedule B1 of the Insolvency Act 1986.

The UK Part 26A restructuring plan has emerged as a potential alternative to Chapter 11 bankruptcy for distressed companies with international operations. This episode examines how Part 26A compares to traditional U.S. bankruptcy proceedings, including differences in creditor voting, cramdown provisions, court oversight, and the strategic considerations companies must weigh when selecting their restructuring forum.

The Supreme Court of the United Kingdom has unanimously allowed the appeal in Drelle v Servis-Terminal LLC [2026] UKSC 29, confirming that, in principle, a creditor may present a bankruptcy petition based on an unrecognised and unregistrable foreign judgment.

The Court of Session has taken a novel approach to assessing unfair prejudice in CVA challenges, moving beyond traditional vertical and horizontal comparisons to consider broader equitable factors. This first reported Scottish decision in such circumstances could make predicting CVA challenge outcomes significantly more difficult if the approach is adopted in future cases.

When liquidators of Styles & Wood Group assigned potential claims against directors to a third party, the directors challenged this decision in the High Court. The court had to determine whether the directors had standing to bring the challenge and whether the liquidators' decision to assign the claims was objectively reasonable.

The decision explores the limits of the Court of Appeal’s findings in Sequana as to when dividends may be transactions at an undervalue, and suggests a “common sense” approach to identifying the relevant transaction.

The decision in THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 overturns a controversial Court of Appeal judgment and restores what many had long assumed to be the settled legal position.

Terminating a commercial contract requires careful navigation of legal frameworks and procedural requirements. Understanding your contractual and common law termination rights, following proper notice procedures, and recognizing how insolvency affects your options can mean the difference between a clean exit and a costly legal dispute.

Incorporating a company provides a safety net, but it is not an absolute protection against personal risk. The protection of limited liability is conditional, and directors must be aware of the pressure points...