We examine what impact the Court of Justice of the European Union decisions in Hampshire v PPF and PSV v Bauer will have on PPF compensation post-Brexit

Background

The Corporate Insolvency and Governance Act 2020 (CIGA) came into force on 26 June 2020.

Schedule 10 of CIGA restricted the presentation of debt-related winding-up petitions where a company cannot pay its bills (including rent) due to COVID-19 in Great Britain.

These restrictions were initially due to end on 30 September 2020, but have since been extended until 30 September 2021.

The Current Position

Introduction and points for consideration by trustees

Summary

The Corporate Insolvency and Governance Bill (the Bill) has completed all of its stages in the House of Commons, without material amendment to the Bill as originally drafted. All three readings in the House of Lords are scheduled to take place in June 2020, and expectations are that the Bill will receive Royal Assent, and will be enacted, very shortly thereafter.

When a business is distressed and is due to run out of cash, advisors are often called upon to carry out an accelerated M&A process. Whilst there may be scope for the process to be run on a solvent (share sale) basis, it may need to be implemented on an assets basis, often via a formal insolvency process. Because of the undeniable threat of insolvency, directors of distressed businesses should obtain specialist legal advice on their duties at the earliest possible stage.

Board considerations

Imagine that IPs have been appointed as administrators of an aerospace engineering company that operates around the world. The company was financially stressed before the COVID-19 pandemic and then sales dried up. With no reasonable prospect in sight, the directors filed for administration and questions have since been raised about how the directors conducted the company’s affairs shortly before it entered administration.

The temporary measure allowing companies and other qualifying bodies to hold AGMs virtually will be extended until 30 December 2020. The measure, which was introduced as part of the UK Government's response to the COVID-19 pandemic, had been due to expire on 30 September 2020.

One of the first questions we are often asked by buyers in distressed M&A situations is what is the likely quantum of employee liabilities? It is not uncommon for buyers to want to restructure the workforce post-completion and early engagement on this issue is key.

Transaction structure and its impact on employment

2019 was for many a year of waiting…we waited, and waited and indeed still wait…for Brexit. That inevitably has had an impact on the property world and in particular the investment market experiencing a degree of inactivity. Somewhat ironically though Brexit has given us one of several important decisions in 2019 relevant to the Real Estate Disputes world.