Assignment of Administrators’/Liquidators’ Causes of Action - COMMENCEMENT TO BE CONFIRMED
This is part of a series of posts on the Small Business, Enterprise & Employment Bill that has now come into force on 26 March 2015 following the grant of Royal Assent and is now the Small Business, Enterprise and Employment Act 2015 (“the Act”).
This series of posts is intended to update the readers of the key changes, which should radically transform the transparency of the marketplace as regards the operation, control, ownership and risk associated to limited companies in the UK.
We have not addressed all of the issues described in our previous posts, to avoid duplication, but would welcome any queries from the reader in this respect.
The commencement of these changes is different dependant on which part of the Act is being reviewed (Section 164 of the Act defines commencement) and we have highlighted below the relevant commencement dates. Where we below stated “to be announced” this means it has not yet come into force and will commence upon the making of a Commencement Order.
The changes as set out below will be extremely important to all directors, companies and individuals with business in the future and it cannot be emphasised too strongly how important it is that you are prepared for these proposed changes. At Francis Wilks & Jones we can advise on all matters subject to these posts.
SectionS 120-121 of the Act PRO was included in the original bill perhaps to prepare for this, but has nevertheless remained, and provides the power for appointed Liquidators or Administrators to assign certain causes of action that arise only in insolvency proceedings (and therefore were previously unassignable, unlike other types of claim).
As stated in the previous post, the proceeds of such assigned causes of action would not be caught by any secured debt held by a debenture holder. This is very good for creditors, who could benefit from the increased presence of litigation funders in the legal market (as is occurring in various other sectors).
If you are an insolvency professional, or a defendant facing such proceedings, then at Francis Wilks & Jones we can certainly help. We can introduce the appropriate litigation funders or alternatively assist you with the technical and strategical aspects of your case.
