Insolvency News and Legal Updates - February 2018

The aftermath of the Carillion collapse

The fallout from Carillion's collapse in January continues to play out as it transpired this week that the company had delayed payments to subcontractors by up to 120 days. Carillion allegedly used tactics such as faulting invoices and finding minor problems with work undertaken in order to delay payment.

Carillion's failure has also caused concerns about job losses and non-performance of contracts. Carillion employed 20,000 in the UK alone and the latest Official Receiver statement confirmed that to date, as part of the liquidation, 989 jobs have been lost. A number of jobs have been saved, however, as new providers have taken on contracts, including prison facilities management and defence bases catering and cleaning. The Official Receiver is continuing to try to find new suppliers to take over Carillion's contracts and salvage something from the wreckage.

Elsewhere, Carillion's former directors have been the subject of intensive questioning from the joint business and pensions committee of MPs over what action they took to address the company's problems before its collapse. The grilling appears to be far from over: the directors' answers were deemed unsatisfactory, with their behaviour "delusional" by the committee chairs. Carillion's auditors, KPMG, face questioning before the committee next week.

Ashfords' Take: the Carillion saga continues, and more revelations are bound to come out in the coming weeks.

The Toy-kover: bidders compete for Toys R Us

The deadline for interested purchasers of every child's favourite superstore, Toys R Us, to submit their letters of intent fell last week, with sources indicating that several parties had expressed interest in purchasing the beleaguered retailer. Hilco Capital, the company which saved HMV from Liquidation in 2013, have reportedly submitted a bid and are believed to be amongst the favourites for the troubled retailer.

Toys R Us' financial woes made headlines just before Christmas, when it transpired they had entered into a last minute restructuring to deal with mounting creditor pressure.

Ashfords' Take: Another retailer struggles to adapt to increased online competition.

Recent cases

Re Capital Funding One Ltd [2017] EWHC 3567 (Ch)

Capital Funding One Limited (the "Company") arranged short term bridging finance for borrowers who were unable to obtain loans from more conventional sources. The funding for these loans were obtained from King Street Bridging Limited ("King Street").

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Ball (liquidator of PV Solar Solutions Ltd) and another -v- Hughes and another [2017] EWHC 3228 (Ch)

PV Solar Solutions Ltd (the "Company") supplied and installed solar panels. When the government reduced preferential tariffs, the Company's profits were affected and it entered Administration in May 2013. The Company subsequently entered into voluntary Liquidation in November 2014.

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