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Cross Border Insolvency Bulletin - December 2018

New Media Distribution Company SEZC Ltd (formerly known as New Media Distribution Company Ltd) v Kagalovsky

The Court applied sections 423-425 of the Insolvency Act 1986 (IA) to the transfer of an interest in a Ukrainian television station. When analysing the Defendant's actions the Court considered the transaction was made for a prohibited purpose.

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Her Majesty's Revenue and Customs v Robert James Leslie Stayton

Despite the debtor's contention that his primary residence was in the United States, the Court held that it had jurisdiction to make a Bankruptcy Order following a petition presented by HMRC.

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Short stories

Fashion chain New Look plans to withdraw from China

Fashion chain New Look is said to be preparing to close its Chinese business operation in the foreseeable future as well as closing key stores from France, Belgium and Poland after it was reported it lost more than £37 million overseas in the year to March.

This comes shortly after the chain announced their plans to close 85 stores in the UK, and has already closed 20 of the 130 stores across China.

New Look would not be the only British fashion chain to pull out of China however with TopShop announcing in August that it was terminating a franchise agreement "by mutual agreement". The fashion brand is far from the only high street name to announce struggles in 2018 with Mothercare, Carpetright, Byrons, Homebase and Prezzo also amongst the retailers to announce CVA's and store closures this year.

Despite the news, Executive Chairman Alistair McGeorge remains hopeful about their future: "Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon. However, we are on the right track and continue to drive further efficiencies across the business".

Japanese insurer Tokio Marine Group receives support of the court for Brexit plans

On 19 November 2018, Japanese insurer Tokio Marine Group confirmed it had received the backing of the High Court in London to complete the transfer of its insurance contracts from the UK to its subsidiary based in Luxembourg.

Currently, "passporting rights" allow banks and financial services companies to trade cross border in any EU or EEA state without authorisation from each member state. The concern is that those rights will no longer be available in the UK in the event of a "no deal" Brexit.

This step by Tokio Marine Group to transfer their company to Luxemburg will ensure it is still based in the EU and therefore subject to passporting rights; making it easier to pay out to policyholders living in the European Economic Area

Describing the approval as a "major step in securing our Brexit plans", the Chief Executive Thibaud Hervy confirmed that this approval would allow the company to continue to trade and provide the highest level of service regardless of the outcome of the Brexit negotiations. Following this decision it is unclear how many other UK based insurers will follow suit.

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