Apart from being divided (supposedly) by a common language, the laws of the UK and the US take a different approach to the recharacterisation of contracts. In particular, it is said that the UK takes a formal approach, while the US adopts the functional approach. Typically, the question arises when the true character of a financing agreement falls to be determined: assuming it matters, is the transaction one which creates an absolute interest (e.g. by way of sale) or one which is less than absolute (e.g. a security interest)? But what does it mean to adopt a functional, as opposed to a formal, approach in this context?
In this article, Weil lawyers Mark Lawford, Peter Isakoff, Alinta Kemeny, Elisabeth Sperle and Patrick Steel, together with Mark Arnold QC of South Square, explore that distinction.
This article first appeared in South Square Digest, October 2018, and is republished with the permission of South Square.
The recent budget flagged the re-introduction of preferential creditor status for the UK tax authority (HMRC) in insolvencies in certain limited circumstances. The changes will be effective from 6 April 2020 (no draft legislation is available yet) and will provide for HMRC to become a preferred creditor in relation to,Read the full article →
Over the last two years, BEIS has issued a number of consultations either focussed on, or touching upon, corporate governance issues in insolvency or the broader insolvency framework. BEIS has now published its formal response to these consultations (the “Response”) and, although many of the key areas are subject toRead the full article →
2018 has been described as “the year of the CVA”, especially in the retail and casual dining sectors. Although company voluntary arrangements can be a useful tool to compromise portfolios of leasehold obligations, there are certain situations where a CVA may be unsuitable. 1. When a full operational and/or financialRead the full article →
In Debtwire Europe’s latest podcast, Weil restructuring partner Andrew Wilkinson discusses Carillion’s filing for compulsory liquidation, the weaknesses it and recent cases, including Maplin and Toys R US UK, expose in the UK’s rescue regime, and some solutions going forward. This content is re-published with the permission of Debtwire Europe.