Banks and receivers plan Lords appeal over rescues
Roger Powdrill of Touche Ross, the administrator of Paramount Airways, yesterday confirmed that he had received leave to appeal against the Court of Appeal decision on 22 February that plunged Britain's company rescue specialists into crisis.
Last month Michael Heseltine, President of the Board of Trade, overturned the worst effects of the Appeal Court's recent decision on Paramount, which would have forced receivers to sack whole workforces within 14 days when they were sent in to rescue a company, but the Government decided that retrospective legislation would be unconstitutional.
This has left receivers, and the high-street banks that appoint them, with the threat of claims for millions of pounds from directors sacked between 1986 and the passing of Mr Heseltine's bill last month.
If a director of a failed company won such a claim, the receivers would have to reclaim the money from creditors to whom they had already made payouts - mainly the high-street banks.
The fear and uncertainty created by the Paramount decision has prompted many receivers to withhold funds that they would normally have paid straight over to creditors, mainly the banks, in case former employees might bring claims.
For instance, Ernst & Young, the former administrators of the Canary Wharf development in London's Docklands, are already facing a pounds 12m claim from three former directors of O&Y relating to severance terms in their employment contracts.
The appeal will probably be heard in October, and could cost pounds 200,000. Normally it would be funded from creditors' funds in the Paramount administration. But the groups decided that the threat to Britain's 'rescue culture' merits independent funding. The Society of Practitioners of Insolvency is co-ordinating the fund.
- 1 Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
- 2 Woman accidentally shoots herself in the head while posing for a selfie
- 3 Art Garfunkel: Paul Simon is a 'monster' with a Napoleon complex
- 4 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...