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 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
Car tax disc changes: Five facts you never knew about your (almost obsolete) tax disc
The Aral Sea: Nasa pictures show how what was once the fourth largest lake in the world has become almost completely dry
Brad Pitt, on the moment he completely lost his temper with Clint Eastwood's son
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...