There’s been plenty of changes to the insolvency world and it looks like they are continuing with the removal of the insolvency exemption to the Jackson Reforms. As my colleague Laura Baker discussed in her article “LASPO – What Should Insolvency Practitioners Be Doing Now That The Exemption Is Coming To An End?” last week it looks like we are about to see the end of litigation CFA’s. This ought to prompt a flurry of activity in the world of insolvency litigators as Practitioners look to try and commence their claims before the end of the period.
However one of the less well heralded changes ushered in by the Small Business, Enterprise and Employment Act 2015 (“SBEE”) is the amendment at section 118 of SBEE which gives Office Holders the power to assign certain causes of action by inserting a new provision 246ZD. Actions for wrongful trading, fraudulent trading, undervalue or preferences and extortionate credit transaction may now be assigned to third parties. The actions can be assigned free from any argument as to whether or not any realisations would be caught by the floating charge courtesy of section 119 of SBEE which inserts a new section 176ZB into the Insolvency Act 1986. Thus if you find yourselves in a position where you can’t quite decide whether to prosecute an action or not and a creditor is pressuring you to do so, you now have the tools to offer them the chance to take it forward themselves and provided it is done on a justifiable basis avoid any un-necessary criticism.