The troubles possibly faced by WeWork, the shared office space company, were well documented long before the global impact of COVID-19 was felt. WeWork, unlike other shared office companies, tends to use a more inherently risky business model, taking long leases and carving them up into short-term flexible letting arrangements. Whilst some shared office companies take on geared leases, passing up a percentage of revenue, and thus sharing the risk and reward, WeWork are understood to have a larger holding of fixed rent leases.

The Corporate Insolvency and Governance Act 2020 (the Act), which came into force on 26 June 2020, has been described as ushering in some of the most significant changes to the UK’s restructuring and insolvency regime in nearly 20 years.

The Business Secretary Alok Sharma has proposed a relaxation to the current insolvency rules, in the hope that the measures will give companies some breathing space in the face of COVID-19.

Suspension of wrongful trading rules

The proposed changes include a temporary suspension of wrongful trading rules, which Alok Sharma suggested would apply retrospectively from 1 March 2020 for an initial period of three months.

We are hoping to take on new premises that are currently occupied by the administrators of the previous failed tenant. They will not give an indication of when they intend to leave and this is holding up our own plans. Is there anything we can do to force the administrators to tell us when they will vacate the premises?

Moving to new premises is always stressful, and having to wait for an administrator to vacate is only going to compound the matter. This is increasingly common and can take quite some time to resolve.

Following three profit warnings in recent months, the collapse of Carillion under a mountain of debt could hardly be described as a surprise. The fact that Carillion has entered compulsory liquidation may raise eyebrows. Administration would have allowed the company to continue operating whilst buyers were sought for those parts of the business that remained viable; liquidation is an acknowledgement that, by the time it collapsed, Carillion simply had no assets to sell that anyone would have been interested in buying. All that was left were the contracts.

What is its aim?

The general principle of the protocol makes sense: provide the debtor with all the information in order that they can make an informed decision, and respond regarding payment or any issues they disagree with and try and avoid involving the court where possible. In a genuine dispute where proceedings might otherwise be brought prematurely before the individual debtor had a chance to review and consider all the information, this level of consumer protection is welcomed.

Question

We have discovered a serious structural defect in a development we completed about seven years ago. All the indications are that this is due to defective design by the design and build contractor. The contractor is insolvent. Is there anything that we can do?

Answer