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Corporate rescue: a game of three halves

Published online by Cambridge University Press:  02 January 2018

Vanessa Finch
Vanessa Finch*
Affiliation:
London School of Economics and Political Science
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Abstract

Three connected processes make up the UK corporate rescue regime: the formal, legal regime, informal approaches and the quasi-formal system, as exemplified by the pre-packaged administration. These three processes not only operate through different procedures but they are also attuned to the pursuit of different objectives and values, they are subject to different controls and they involve different roles for, and relationships between, the parties affected by corporate rescues. A number of negative and identifiable consequences flow from such divergences. An understanding of the tensions between these three systems and an awareness of the challenges posed by transition through different procedures does, however, help to explain many of the deficiencies of current corporate rescue processes and it also provides an enhanced basis for considering current proposals for reforming restructuring and working towards an improved rescue regime.

Type
Research Article
Information
Legal Studies , Volume 32 , Issue 2 , June 2012 , pp. 302 - 324
Copyright
Copyright © Society of Legal Scholars 2012

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References

1. See Insolvency Service (IS) Consultation/Call for Evidence: Improving the Transparency of, and Confidence in, Pre-packaged Sales in Administrations (London: IS, March 2010)Google Scholar (hereafter ‘2010 Pre-pack Consultation’) Option 2. On 26 January 2012, however, the then Business, Innovation and Skills Minister, Edward Davey, announced that he would adhere to the Government's moratorium on regulations affecting micro-business and would, therefore, ‘not be seeking to introduce new legislative controls on pre-packs at this time’– see Written Ministerial Statement: Pre-Packaged Sales in Insolvency (26 January 2012).

2. See White Paper Productivity and Enterprise (Cm 5234) (London: 2001) para 2.15.

3. See Explanatory Notes to the Enterprise Act 2002 which state that ‘rescuing the company as a going concern’ is intended to mean ‘the company and as much of its business as possible’ (para 647). It can be argued that the Insolvency Act 1986, Sch B1 now ranks the administrator's priorities as follows: protection of the creditors as a whole (which may include rescue of the business); effecting rescue of the company as a going concern; and protecting the interests of the secured or preferential creditors. See further Frisby, S ‘in search of a rescue regime: the Enterprise Act 2002’ (2004) 67) MLR 247 CrossRefGoogle Scholar at 262–263.

4. Insolvency Act 1986, s 72A. Creditors with ‘qualifying floating charges’ that were created prior to the EA 2002, or those with charges that are exempted under s 72A into the Insolvency Act 1986, may still appoint administrative receivers – see IA 1986, ss 72B–72G. On receivership generally see Finch, V Corporate Insolvency Law: Perspectives and Principles (Cambridge: CUP, 2nd edn, 2009)CrossRefGoogle Scholar ch 8.

5. See Insolvency Act 1986, s 123 and further Goode, R Principles of Corporate Insolvency Law (London: Sweet and Maxwell, 4th edn, 2011)Google Scholar ch 4.

6. See Insolvency Act 1986, Sch A1. On CVAs see Walters, A and Frisby, S Preliminary Report to the Insolvency Service into Outcomes in Company Voluntary Arrangements (London: Insolvency Service (IS), March 2011)Google Scholar; IS Proposals for a Restructuring Moratorium (London: IS, July 2010); IS Encouraging Company Rescue – a Consultation (London: IS, June 2009); J Tribe ‘CVAs: a new hope and a Tudor orthodoxy’[2009] JBL 454.

7. See IA 1986, Sch B1, para 69; para 59(1). The powers are listed in IA 1986, Sch 1 and in IA 1986, Sch B1, paras 61–63 and paras 70–73.

8. See IA 1986, Sch B1, para 68. Creditors' meetings allow unsecured creditors to hold administrators to account but the administrator is not obliged to call such a meeting if he thinks, inter alia, that creditors can be paid in full or that there is insufficient property for a distribution to unsecured creditors – see Sch B para 52(1).

9. Ex p James[1874] LR 9 Ch App 609 – see Milman, D ‘the administration order procedure’ (2002) 17) Company Law Newsletter 1 at 3 Google Scholar.

10. See Re Edennote Ltd[1996] 2 BCLC 389 at 394–395 combined with Edge v Pensions Ombudsman[2000] ch 602 at 627–631 – cited in Lightman, G and Moss, G The Law of Administrators and Receivers of Companies (London: Sweet and Maxwell, 4th edn, 2007) pp 236–241 Google Scholar. On regulating the administrator's conduct and rendering him liable see IA 1986, Sch B1, paras 74 and 75; Four Private Investment Funds v Lomas[2009] BCC 632, [2009] 1 BCLC 161; Re Zegna 111 Holdings Inc[2009] EWHC 2994 (Ch) and Re Charnley Davies Ltd[1990] BCC 605 (which concerns the scope of IA 1986, s 27 and s 212 – the ‘old’ administration's similar provisions).

11. The substantive decisions and commercial judgments of administrators, are, however, not tightly constrained by the judiciary since the courts have largely deferred to the professional expertise and judgment of the appointee – see eg Re Transbus International Ltd[2004] 1 WLR 2654, [2004] BCC 401; Re Ballast plc[2005] 1 WLR 1928, [2005] BCC 96; Re Lehman Brothers International (Europe) (in admin) Four Private Investment Funds v Lomas[2009] BCC 632, [2009] 1 BCLC 161; Re Zegna 111 Holdings Inc[2009] EWHC 2994 (Ch). This perhaps contrasts with more court controlled regimes in other jurisdictions.

12. IA 1986, Sch B1, paras 42 and 43 – applicable whether the administration is out of court or via a court order.

13. IA 1986, Sch B1, para 42(2)(3).

14. See Metro Nominees (Wandsworth) (No 1) v Rayment[2008] BCC 40.

15. IA 1986, Sch B1, paras 43(6A) and 41(1).

16. See Finch, V ‘Control and coordination in corporate rescue’ (2005) 25 (3) LS 374 at 375 Google Scholar.

17. See further V Finch ‘Corporate rescue: who is interested?’ JBL (forthcoming May 2012). Banks with ‘qualifying floating charges’ are able to use the streamlined out of court appointment procedure in all cases, not merely in situations of urgency, and they are able to determine who should be appointed to the post of administrator (IA 1986, Sch B1, paras 14(1) and 18(3)). This gives the banks the power to insert their chosen administrator with speed and without regard to the other creditors or the courts – see Davies, S Insolvency and the Enterprise Act 2002 (Bristol: Jordan, 2003) pp 40–41 Google Scholar.

18. Office of Fair Trading (OFT) The Market for Corporate Insolvency Practitioners (London: OFT, 2010)Google Scholar para 3.50.

19. Ibid, para 4.8.

20. See further Finch, above n 17. On creditors' meetings being used by the ‘dominant actors’ as private exchanges see Wheeler, S ‘Empty rhetoric and empty promises: the creditors' meeting’ (1994) 21) Journal of Law and Society 350 at 369 CrossRefGoogle Scholar.

21. By application to court (IA 1986, Sch B1, paras 11–13) or out of court (IA 1986, Sch B1, paras 14–21).

22. As in the US Ch 11 reconstruction procedure which purports to leave the pre-insolvency directors of the company in control. In a study of US firms, however, only 46% of incumbent directors were in place when the firms emerged from bankruptcy or settled with creditors two years later and in 8% of cases the whole board was replaced – see S Gilson ‘Bankruptcy, boards, banks and blockholders’ (1990) Journal of Financial Economics 355. See further McCormack, G ‘Control and corporate rescue – an Anglo-American evaluation’ (2007) 56) ICLQ 515 CrossRefGoogle Scholar; Finch, above n 4, pp 279–281.

23. IA 1986, Sch B1, paras 22–34.

24. Ibid, para 26. On notice requirements and the implications of non-compliance see Re Derfshaw and Others[2011] EWHC 1565 (Ch); Adjei and Others v Law For All[2011] EWHC 2672 (Ch); Minmar (929) Ltd and Anor v Freddy Khalatschi and Anor[2011] EWHC 1159. Minmar has proved a controversial decision – see N Barnett ‘When is an appointment not an appointment: should we gamble on Minmar?’ (2011) Recovery 9 (Autumn); D Gray ‘Directors' appointment of administrators – to serve or not to serve?’ (2011) Corporate Rescue and Insolvency 135.

25. IA 1986, Sch B1, para 36.

26. See M Jervis ‘A tough act to follow’ (2003) Recovery 13.

27. See eg Lightman and Moss, above n 10, p 246; Mokal, R and Armour, J ‘the new Uk rescue procedure – the administrator's duty to act rationally’ (2004) 1) International Corporate Rescue 136 Google Scholar at 137–138; Finch, above n 4, pp 446–449.

28. See J Armour ‘Should we redistribute in insolvency?’ in Getzler, J and Payne, J (eds) Company Charges: Spectrum and Beyond (Oxford: OUP, 2006) p 219 Google Scholar; Meeks, G and Meeks, JG Self-fulfilling Prophesies of Failure (Cambridge: Judge Business School Working Paper, 2004)Google Scholar.

29. On the destructive propensity of asset-based lenders to seek to liquidate collateral when they hear of a company's difficulties (and the problems of controlling such creditors) see Armour, above n 28, p 219.

30. On the advantages of informality see Omar, P ‘the convergence of creditor-driven and formal insolvency models’ (2005) 2) International Corporate Rescue 251 Google Scholar; World Bank Insolvency Initiative, Symposium Paper No 6, s 8 Informal Insolvency Practices (Washington DC: World Bank, 1999); European High Yield Association EHYA Submission on Insolvency Law Reform (London: EHYA, 2007) pp 3–4 Google Scholar; Finch, above n 4, ch 7.

31. See Segal, N ‘Rehabilitation and approaches other than formal insolvency procedures’ in Cranston, R (ed) Banks and Remedies (Oxford: OUP, 1992) p 147 Google Scholar.

32. See ibid, pp 148–149; Campbell, C and Underdown, B Corporate Insolvency in Practice: An Analytical Approach (London: Chapman, 1991) pp 62–65 Google Scholar.

33. Belcher, A Corporate Rescue (London: Sweet and Maxwell, 1997) p 116 Google Scholar.

34. It may also be necessary to persuade the hedge funds or other holders of credit instruments to agree to a course of action – see J Willman ‘Rescuers armed with new ideas’Financial Times 19 March 2007.

35. The courts may come onto the scene if, for example, an action is brought for wrongful trading under s 214 of the Insolvency Act if the company subsequently ends up in liquidation. IA 1986, s 214 provides for potential personal liability on the director's part where there is trading or other activity and, at some time before a winding up that ‘person knew or ought to have concluded’ that there was no reasonable prospect that the company would avoid going into insolvent liquidation: see further Finch, above n 4, pp 698–699.

36. See Finch, V ‘Pre-packaged administrations and the construction of propriety’ (2011) 11) JCLS 1 Google Scholar; V Finch ‘Pre-packaged administrations: bargains in the shadow of insolvency or shadowy bargains?’[2006] JBL 568; B Xie ‘Regulating pre-packaged administrations: an incomplete agenda’[2011] JBL 513; J Goldring ‘A perfect murder?’(2008) Recovery 34–35 (Summer); Frisby, S A Preliminary Analysis of Pre-Packaged Administrations: Report to R3 – The Association of Business Recovery Professionals (London: R3, August 2007 Google Scholar); Qi, L ‘the rise of pre-packaged corporate rescue on both sides of the Atlantic’ (2007) 20) Insolvency Intelligence 129 Google Scholar; Walton, P ‘Pre-packaged administrations – trick or treat’ (2006) 19) Insolvency Intelligence 113 Google Scholar; D Flynn ‘Pre-pack administrations – a regulatory perspective’ (2006) Recovery 3 (Summer); S Davies ‘Pre-pack – he who pays the piper calls the tune’ (2006) Recovery 16 (Summer); S Mason ‘Pre-packs from the valuer's perspective’ (2006) Recovery 19 (Summer); M Ellis ‘The thin line in the sand’ (2006) Recovery 3 (Spring); J Moulton ‘The uncomfortable edge of propriety – pre-packs or just stitch-ups?’ (2005) Recovery 2 (Autumn).

37. According to the official insolvency statistics, 2,835 companies entered administration during 2010, indicating that approximately 27% involved pre-pack sales during the period. This is presently the most reliable indicator of the number of pre-packs undertaken, as there is no official statistical record of pre-pack sales: see Insolvency Service (IS), Report on the Operation of SIP 16: 1 January to 31 December 2010 (London: IS 2011) p 5 Google Scholar. On the increasing use of pre-packs in European restructurings see K Breken and M Kemp ‘Schoeller Arca, or the curious case of the creeping pre-pack’ (2010) Corporate Rescue and Insolvency 101.

38. See the articles cited above at n 36. For examples of media concern see S Mundy ‘Retailers eye controversial pre-packs’Financial Times 15 September 2011; H Ebrahimi, J Dunkley and B Harrington ‘Silentnight “pre-pack” deal sinks pensioners’Daily Telegraph 14 May 2011; R Watts and C Newell ‘Foreign firms use lax UK law to dump debt’Sunday Times 7 March 2010; M Herman ‘Abuse of pre-pack deals “could turn Britain into an insolvency brothel” ’The Times 18 January 2010. For a supportive view of pre-packs see N Crouch and S Amirbeaggi ‘Pre-packs: a legitimate means to phoenix an insolvent company’ (2011) Recovery 32 (Summer) and for a ‘cautiously optimistic’ view see S Frisby ‘The pre-pack promise: signs of fulfilment?’ (2010) Recovery 30; House of Commons Business and Enterprise Committee The Insolvency Service – Sixth Report of Session 2008–9 (London: HC 198, 6 May 2009).

39. See Finch (2011), above n 36.

40. Pre-Packaged Sales in Administrations Statement of Insolvency Practice 16 (London: R3, 2009) – professional guidance for IPs issued by the Joint Insolvency Committee (JIC) and which was adopted by all the relevant professional regulatory bodies and took effect from 1 January 2009. See further Ashurst LLP ‘Statement of insolvency practice 16: proposed changes and report on compliance’ (2011) Corporate Rescue and Insolvency 101.

41. Clydesdale Financial Services v Smailes[2009] EWHC 1745 involved the removal from office of an administrator. A factor in that removal was his decision not to consult major creditors before the sale of a troubled solicitors firm in a pre-pack. It has been argued, moreover, that, although it is clear that pre-packs are legal and that compliance with SIP 16 ‘is a must’, judicial opinions on the ‘underlying morality’ of pre-packs may be divided – see Milman, D ‘Judicial reflections on the administration process: a 2010 perspective’ (2010) 283) Company Law Newsletter 1 at 3 Google Scholar. See also Re Halliwells LLP[2011] BCC 57 and Re Kayley Vending Ltd[2009] BCC 578.

42. SIP 16 (para 3) cautions that a power to sell assets without the approval of creditors should only be ‘exercised in genuine furtherance of the purpose of administration’. On the court's position see Clydesdale Financial Services v Smailes[2009] EWHC 1745.

43. Insolvency Service (IS) Report on the First Six Months Operation of SIP 16 (London: IS, 2009)Google Scholar. See also IS Report, above n 37. On whether the sale (in the Clydesdale case [2009] EWHC 1745) was actually a pre-pack see Frisby, S ‘All go on the pre-pack front’ (2009) 259) Company Law Newsletter 1 at 3 Google Scholar.

44. The parties involved in administrations may be motivated by their self-interests (with IPs looking to their fees, banks focusing on debt recovery etc) but the values espoused by the law are as stated in Table 1.

45. This article, as noted, focuses on cases that progress from informality to quasi-formality to formality. Not all cases do so – if informal negotiations secure a rescue/reconstruction, for instance, there will be no such progression.

46. See Finch (2011), above n 36, at 22–27.

47. On the difficulty of overriding a commercial construction of clauses see HHY Luxembourg SARL (2) AMP Capital Investors Ltd v Barclays Bank plc and Ors[2010] EWCA Civ 1248; C Martin-Royale ‘A commercial approach in a commercial world’ (2011) Recovery 33 (Spring).

48. Para 2 of SIP 16 states that Practitioners who are party to a pre-packaged sale, whether as adviser to the company before the appointment, as the appointed administrator, or both, should bear in mind the duties which they, and those who act on their advice, owe to parties who might be affected by the arrangement, and should have regard to the associated risks. Para 6 (dealing with preparatory work) adds that Practitioners should be mindful of the potential liability that may attach to any person who is party to a decision that causes a company to incur credit and who knows that there is no good reason to believe it will be repaid.

49. For a discussion of interoperability issues in another context, see Mulley, C and Nelson, J ‘Interoperability and transport policy’ (1999) 7(2) Journal of Transport Geography 93 CrossRefGoogle Scholar.

50. For a more detailed discussion of the potentially mediating role of the judiciary, see Finch (2011), above n 36.

51. See further ibid.

52. See ibid, at 21–22.

53. Option 2 of Insolvency Service, 2010 Pre-pack Consultation, above n 1, p 6. The requirement would demand filing of the information at Companies House and details of the pre-pack would thus be in the public domain – which would enable businesses, creditors and others to access the information. In January 2012 the Minister mothballed plans for new legislation on pre-packs and stated that his officials would explore what could be done within existing regulation to improve confidence and transparency – see Written Ministerial Statement, above n 1. For a former disclosure proposal see Davies, above n 36.

54. See 11 USC, para 1126(b) and the Bankruptcy Abuse Prevention and Consumer Protection Act 2005. In the alternative, satisfaction of any relevant provisions of applicable non-bankruptcy law on disclosure will suffice – see Federal Rules of Bankruptcy Procedure, r 3017 and 3018. If, in the USA, the bankruptcy court finds that a disclosure statement relevant to a pre-pack is inadequate, the debtor will have to endure the delays and uncertainties of amending and redistributing the statement and re-soliciting plan acceptances. For discussion see Plevin, M, Ebert, R and Epley, L ‘Pre-packaged asbestos bankruptcies: a flawed solution’ (20022003) 44) S Tex Rev 883 Google Scholar; Vilaplana, V ‘a pre-pack bankruptcy primer’ (1998) 44) Prac Law 33 Google Scholar; Kornberg, A ‘the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005’ (2006) 3) International Corporate Rescue 33 Google Scholar. See also In re City of Colorado Springs, 177 BR 684 at 691 (Bankr D Colorado 1995).

55. The same problems would afflict the proposal to provide that the IP who carries out a post pre-pack administration should be a different person from the IP or non-IP that carried out the pre-pack negotiations – Option 4 of 2010 Pre-pack Consultation, above n 53. Seen also Written Ministerial Statement 2012, above n 1.

56. The ‘phoenix syndrome’ originally described a process whereby a company, owing large sums to its unsecured creditors, would be put into voluntary liquidation with the liquidator then selling the entire business at a knock-down price to a new company incorporated by the former directors of the defunct company. Then, what was essentially the same company, would rise ‘phoenix-like’ from the ashes of the old carrying on business in disregard of the claims of the first company's creditors – see Sealy, L and Milman, D Annotated Guide to the Insolvency Legislation 2011 (London: Sweet and Maxwell, 14th edn, 2011)Google Scholar.

57. Such directors would still be potentially liable under the Insolvency Act 1986, s 214 wrongful trading provisions if the company does go into insolvent liquidation in the wake of a pre-pack. For a credit insurer's comments on the ‘blatant unfairness’ of allowing continued trading with unsecured creditors while discussing pre-packs with secured creditors, see Mundy, above n 38.

58. See ABI UK Insolvency Legislation and Pre-pack Administrations (London: ABI, July 2009)Google Scholar.

59. See the Insolvency Act 1986, s 214.

60. IS, above n 37, p 12.

61. See Written Ministerial Statement: Improving Transparency and Confidence in Pre-Packaged Sales in Administration (Pre-Packs) (31 March 2011) and the subsequent Written Ministerial Statement: Pre-Packaged Sales in Insolvency (26 January 2012), above n 1.

62. Mr Davey stated in 2011 that administrators already needed to explain the reasons for a pre-pack to creditors in order to comply with SIP 16 – the statement of professional standards. Such explanations would, in future, have to be lodged at Companies House with administration proposals together with an administrator's confirmation that the sale represents, in their view, best value for the creditors. This, he argued, would improve disclosure and would be of interest to parties who were considering doing business with the purchasing company. On response to the ‘three day proposal’ see V Jonson ‘Consultations galore’ (2011) Recovery 38 (Winter).

63. SIP 16, para 11 continues: ‘Unless it is impracticable to do so, this information should be provided with the first notification to creditors. In any case where a pre-packaged sale has been undertaken, the administrator should hold the initial creditors' meeting as soon as possible after his appointment. Where no initial creditors' meeting is to be held and it is impracticable to provide the information in the first notification to creditors it should be provided in the statement of proposals of the administrator which should be sent as soon as practicable after his appointment.’

64. See J Hughes ‘Insolvent business reform seen as threat’Financial Times 23 June 2011; B Green, President, Turnaround Management Association ‘Speedy action is key to saving distressed businesses’FTCom 5 May 2011. For further concerns regarding the reforms to pre-packs see F Griffiths and B Jones ‘Pre-packs: packed off for good?’ (2011) Corporate Rescue and Insolvency 109; R Insall ‘Pre-packaged administrations: misguided or misunderstood?’ (2010) Corporate Rescue and Insolvency 99. See also the 2012 Written Ministerial Statement, above n 1.

65. See Moulton, above n 36, p 3. See also IS Improving the Transparency of, and Confidence in, Pre-packaged Sales in Administration, Summary of Consultation Responses (London: IS, March 2011) pp 36–39, reporting that unsecured creditors, trade organisations and creditor organisations were generally supportive of a court approval mechanism but that secured creditors, IPs, regulators and insolvency lawyers were opposed ‘on grounds of principle and practicality’ (most notably with reference to costs, delays and reduced returns).

66. Proponents of this approach argue that it differs from pre-scrutiny in not slowing down the pre-pack process and sought-after sales – see the proposals of the Turnaround Management Association (TMA) as described in TMA President, Bryan Green's letter to the Financial Times of 5 April 2011.

67. See Finch, above n 17.

68. Finch, above n 4, ch 16.

69. Ibid, pp 749–753.

70. Though of relevance may be the Companies Act 2006, s 172 specification that the director's duty is to promote the success of the company – see further Kershaw, D Company Law in Context (Oxford: Oxford University Press, 2009)Google Scholar ch 10.

71. The evidence is that, even in a ‘debtor in possession’ regime, the major creditors routinely replace incumbent managers. In the USA more than half of managers lose their jobs within 2 years of filing for Ch 11 protection – see further Finch, above n 4, p 280 and references at n 144.

72. Insolvency Service, 26 July 2010. On the IS's proposals see eg Z Thirlwell ‘Bankruptcy tourism: will the proposed restructuring moratorium entice more to these shores?’ (2010) Corporate Rescue and Insolvency 237; G Frampton ‘Technical update’ (2010) Recovery 12–13 (Winter).

73. Edward Davey ‘Restructuring moratorium (consultation)’– Hansard HC Ministerial Statement, col 23WS, 26 January 2012.

74. On 1 March 2011, R3 launched a campaign ‘Holding rescue to ransom’ to call for an amendment to IA 1986, s 233. This reform would prevent suppliers ‘demanding ransom payments’, increasing tariffs dramatically or withdrawing supplies on insolvency. It would compel suppliers to continue supplying at a reasonable price on insolvency (provided they are paid to do so) and, R3 argues, it would produce 2000 more rescues: see N Khan ‘Holding rescue to ransom’ (2011) Recovery 40 (Spring); S Law ‘Holding rescue to ransom’ (2011) Recovery 5 (Spring); F Coulson ‘R3's campaign’ (2011) Recovery 5 (Summer).

75. See Insolvency Service Proposals for a Restructuring Moratorium: Summary of Responses (London: IS, May 2011) esp paras 23–27, 36.

76. See J Armour ‘The rise of the “pre-pack”: corporate restructuring in the UK and proposals for reform’, Paper to Insolvency Roundtable Conference: Current Issues in Insolvency, Harris Manchester College, Oxford, 14 January 2011.

77. Walters and Frisby, above n 6, pp 10–11. The authors pointed out (p 11) that, although the CVA moratorium is, for all intents and purposes, restricted to small companies (see Insolvency Act 1986, Sch A1, para 3(2)), large and medium sized companies can access a moratorium by using the administration procedure coupled with a CVA – but no companies in their sample had done so: they had all used a stand alone CVA rather than a CVA within administration.

78. Ibid, p 11.

79. Armour has, however, noted a number of concerns regarding the monitoring role: IPs might not be attracted to this task because of worries about potential personal liabilities and limited powers; there might be conflicts of interest arising from the IPs' prior connection to the company; and the appointment of an IP, even as monitor, might send a very negative signal to the market – Armour, above n 76.

80. See Finch (2011), above n 36.

81. See above n 61.

82. Richard Barnett of Euler Hermes credit insurers – quoted in Mundy, above n 38. Mundy also notes that the printing company Polestar has financially restructured three times since 1998, reported losses of several hundreds of millions of pounds and repeatedly shed liabilities so that a competitor has accused it of undercutting competitors with unsustainable rates, pushing other companies out of business and ‘pretty much knackering an entire industry sector.’

83. Quoted in Mundy, ibid. See also M Andrews ‘The winds of change’ (2011) Recovery 4 (Summer); Griffiths and Jones, above n 64.