This year was already set to be the year that would herald significant changes to UK insolvency laws, with the enactments of the 2002 Enterprise Act and parts of the 2000 Insolvency Act. However, a decision by Mr Justice Lloyd in the High Court in London earlier this month might, in time, be viewed as the most significant change of the lot by providing a solution for the growing number of financially distressed multinationals with EU operations.
In July 2002, the US car hire company, Budget Rent A Car, was placed into Chapter 11. However, an administration order was sought last month for its European operations (BRAC Rent-A-Car International Inc) when it became clear that the company needed protection from its European creditors – protection not adequately provided by Chapter 11. To provide the required protection it was vital that the company had parallel procedures in both jurisdictions, so an administration order was sought from the High Court.
