I had an interesting conversation this week with the Evening Standard, considering the prospect of further company voluntary arrangements, or 'CVAs' on the UK high street as the year progresses.

The vast majority of ‘bricks and mortar’ retailers, as well as hospitality venues, are desperately seeking ways to cut their fixed costs to improve their chances of riding-out the pandemic. Leasehold obligations are often among the most significant of those fixed costs, and the CVA offers a well-tested route to compromise those obligations.

2020: ENGLISH INSOLVENCY LAW REFORM

The Corporate Insolvency and Governance Act (CIGA), which came into force on 26 June 2020, introduced the most significant changes to English insolvency law in a generation. It introduced three permanent changes and implemented temporary measures to support businesses affected by the COVID-19 pandemic.

Foreign sovereigns have long assumed that the Foreign Sovereign Immunities Act (FSIA) provides them with substantial protection against litigants in United States courts. Although the immunity afforded by the FSIA has never been absolute, two recent developments in the Supreme Court of the United States – both involving the Republic of Argentina – have expanded plaintiffs’ ability to locate sovereign assets and force satisfaction of a judgment, notwithstanding the seemingly broad protections of the FSIA.

The rulings are important for sovereign investors for a number of reasons:

Introduction

Virgin Atlantic announced yesterday its plans for a recapitalisation, worth approximately £1.2 billion over the next 18 months. Support has already been secured from the majority of stakeholders.

However, to secure approval from all relevant creditors before implementation, Virgin Atlantic plans to use the new 'restructuring plan' as introduced by the Corporate Insolvency and Governance Act 2020 (CIGA), which came into force late last month.

The Corporate Insolvency and Governance Act (the ‘CIGA’), which came into force on 26 June 2020, introduces the most significant changes to English insolvency law in a generation. In this article, we explore those changes in a ‘question and answer’ format.

At a glance – what has changed?

The CIGA has introduced permanent changes to English legislation that will ensure that England & Wales remains at the forefront of the global restructuring market. These measures are:

The UK Government has today announced plans to introduce new legislation which will require mandatory independent scrutiny of 'pre-pack' administration sales, where connected parties, such as the insolvent company's existing directors or shareholders, are involved in the transaction.

Although the Sunbird scheme of arrangement was approved by the relevant creditors, sanction was refused by Mr. Justice Snowdon, who highlighted:

• a ‘paucity of information provided by the company as part of the scheme process’, and
• a failure to engage with creditors ‘whom the directors clearly felt were irrelevant or would be an obstacle to their plans’.

He remarked that the company’s approach 'fell a considerable distance short of what was required for a fair process'.

Despite commentators’ recent focus on the new Part 26A restructuring plan, introduced in late June by the Corporate Insolvency and Governance Act 2020, the scheme of arrangement under Part 26 of the Companies Act 2006 (“scheme”) remains a popular tool for companies to reach a compromise or arrangement with their creditors and/or its members.

I. Introduction

Complex restructurings are no stranger to colorful facts and unpredictable twists and turns. But few lead to criminal charges. Fewer still involve criminal charges against the chairman of the unsecured creditors’ committee, alleging that he abused his position to benefit himself financially.