Insolvency and Secured Transactions

Author: Katie James

The 2018 Autumn Budget introduced a multitude of changes in respect of HMRC, from amendments to the "personal company" tests for Entrepreneurs' Relief to the extension of Stamp Duty Land Tax first time buyer's relief. One change which seems to have flown largely under the radar is HMRC's move to place themselves as a preferential creditor in respect of taxes that are to be paid by a business's employees or customers but held on trust by the business when a business enters insolvency.

Read more: HMRC to be preferential creditor in corporate insolvency

Author: Stephen B. Selbst

Passive investors in small businesses often take a seat on the board of directors as a way to keep an eye on their investments. But the recent decision in In re Mundo Latino Market, Inc., shows the peril of a director’s failure to actively supervise the business’s employees.

Mundo Latino was a food and household supply business in upper Manhattan. It was capitalized with $1 million from Kathryn Bedke, who owned 70% of the shares of the business, and $100,000 from Kathryn Holler. Ms. Bedke held the titles of vice president and director, and Ms. Holler was president, treasurer and a director. Ms. Bedke had a full-time job elsewhere and did not operate the business or work at the premises.

Read more: Passive Investor, Beware!

Author: Fatih Isik


A significant part of the recent legislative amendments to improve the investment environment are made to Enforcement and Bankruptcy Law ("EBL") numbered 2004. The amendments made within the scope of Law numbered 7101 on the Amendments in Enforcement and Bankruptcy Law and Certain Laws1 ("Law numbered 7101") and the Law numbered 7078 on the Ratification of the Statutory Decree on Certain Regulations within the Scope of State of Emergency with Alterations2 ("Law numbered 7078") shall be addressed.

Read more: Recent Developments on the Enforcement and Bankruptcy Law and Concordat

On the heels of last year’s Hurricane Irma, everyone is mindful about the upcoming 2018 hurricane season. Last year, Hurricane Irma hit Florida and left about 65% of the state without power. In the months following the storm, businesses in the affected areas often struggled to recover, and it was a more difficult process for some more than for others. Those companies that have relied too much on leverage and stretched their borrowing to the limit may find it difficult to get back on their feet.

Read more: Are You Caught in the Storm?: What Bankruptcy Trustees Need to Know About Hurricane Claims

With the latest changes in the Bulgarian Commerce Act, promulgated on December 2016, a complete new set of business stabilization proceedings were created, which are regulated in the amended Fifth part of the Act.The aforementioned amendment, together with the other changes in the Act, are a result of the tendencies at transnational level within the European Union, which have been prevailing in the last years,for creating minimum standards for security and guaranteeing the citizens’ rights and the opportunities for investments. One of the main aims of the European Commission Recommendation from 12 March 2014 is to ensure the possibility for restructuring of businesses with financial difficulties, in order to prevent the risk of becoming insolvent, and to lead to maximum benefit for the businesses and their creditors and employees. The same point is set out in the European Council Recommendation from 14 July 2015, which recognizes the importance of national legislation for facilitating the process of reduction of the debt ratio of businesses. The Recommendation also provides advice for improving the businesses’ restricting mechanisms before the bankruptcy proceeding are instituted.The changes in the Commerce Act are also in compliance with the recommendations of the World Bank, in accordance with the regulations of the bankruptcy proceedings and the rights of the creditors. The new amendment in the field of the stabilization proceedings will enter into force on 01 July 2017.

Read more: Stabilization Proceedings in Bulgaria – Second Chance For Businesses With Financial Difficulties