On 11 February 2021, the English High Court confirmed in gategroup Guarantee Limited that restructuring plans are insolvency proceedings so are not covered by the Lugano Convention.
One of the debt instruments subject to the gategroup restructuring plan contains an exclusive Swiss court jurisdiction clause. Under the Lugano Convention, proceedings relating to "civil and commercial matters" must generally be brought in the jurisdiction benefitting from the exclusive jurisdiction clause.
The English High Court has rejected a creditor's application to bring a moratorium to an end following the monitors' decision not to terminate the moratorium.
Background
A monitor must terminate the moratorium if they 'think' that the company is unable to pay any pre-moratorium debts for which the company does not have a 'payment holiday'. Surprisingly, debts arising under an agreement involving 'financial services' are excluded from the payment holiday.
Decision
On 13 January 2021, the English High Court sanctioned three interconditional Part 26A restructuring plans for the subsidiaries of DeepOcean Group Holding BV.
The plans for two of the companies were approved by the required 75% majority. While the third plan received 100% approval by secured creditors, only 64.6% of unsecured creditors voted in favour.
Consequently, at the sanction hearing the court was required to consider whether the cross-class cram down mechanism in the restructuring plan should be engaged for the first time in the UK.
On 21 December 2021, the UK government launched the future of insolvency regulation consultation, proposing significant changes to insolvency regulation which it says 'has not kept pace with developments in the insolvency market.'
In Uralkali v Rowley and another [2020] EWHC 3442 (Ch) – a UK High Court case relating to the administration of a Formula 1 racing team – an unsuccessful bidder for the company's business and assets sued the administrators, arguing that the bid process had been negligently misrepresented and conducted.
The court found that the administrators did not owe a duty of care to the disappointed bidder. It rejected the claimant's criticisms of the company’s sale process and determined that the administrators had conducted it "fairly and properly" and were not, in fact, negligent.
The High Court recently decided that a prosecution could be brought against an administrator under the Trade Union and Labour Relations (Consolidation) Act (TULRCA) in R (on the application of Palmer) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013.
In Uralkali v Rowley and another [2020] EWHC 3442 (Ch) – a UK High Court case relating to the administration of a Formula 1 racing team – an unsuccessful bidder for the company's business and assets sued the administrators, arguing that the bid process had been negligently misrepresented and conducted.
The court found that the administrators did not owe a duty of care to the disappointed bidder. It rejected the claimant's criticisms of the company’s sale process and determined that the administrators had conducted it "fairly and properly" and were not, in fact, negligent.
On 15 November 2021, the English Court released its reasoned judgment for the sanction of Amicus Finance Plc's (Amicus) restructuring plan.
Background
Amicus, a short term property lender, entered administration in 2018. The administrators proposed a restructuring plan to compromise creditors' claims, exit the administration and ultimately restore the company as a going concern. The company faced imminent liquidation if the plan was not approved. Secured creditor, Crowdstacker, an online peer-to-peer lending platform, opposed the plan.
On 29 October 2021, the UK Insolvency Service published its insolvency statistics for Q3 2021. Notably, the number of company insolvencies was 17% higher than in Q2 2021 and 43% higher than in Q3 2020. This was driven by an increase in company voluntary liquidations (CVLs) to the highest quarterly level for 12 years.
The High Court recently dismissed a landlord creditor's application to overturn a company voluntary arrangement (CVA) initiated by coffee shop chain Caffé Nero. Here, we recap the key facts of the case and summarise the highlights of the High Court's ruling.
The facts
In November 2020, Caffé Nero – hit hard by the COVID-19 pandemic – proposed a CVA to creditors to compromise rent arrears (at 30p in the £1) and reduce future rents for the company's premises.