The recent High Court decision in Re Nostrum Oil & Gas plc [2022] EWHC 2249 (Ch) considers a scheme of arrangement where creditors are the target of Russian sanctions. 

Background 

Since 2021, soaring wholesale energy costs have caused concern for businesses already battling a difficult economic climate with wider inflationary pressures, such as higher interest rates.  

The government's mini-budget on 23 September 2022 cancelled the planned increase in the corporate tax rate (the proposed increase from 19% to 25%). This will assist those companies which are profit-making, but without support to reduce the cost base, this provides limited relief to others.

The Supreme Court has unanimously dismissed the appeal of the decision in BTI –v- Sequana.

At a time when many companies are facing financial difficulties and directors are considering their legal duties, this long-awaited judgment has confirmed that directors have a 'creditor interest duty' when a company is insolvent or bordering on insolvency or an insolvent liquidation or administration is probable.  

Background

The UK insolvency statistics released on 2 August for Q2 2022 (1 April – 30 June 2022) make for fairly sombre, if not entirely unsurprising, reading.

An 81% increase in corporate insolvencies in England and Wales from the same period in 2021 and a 13% increase in insolvencies from Q1 2022. The worst affected sectors are reported to include food, retail and construction.

On 15 August 2022, the UK High Court handed down judgment in Oceanfill Ltd v Nuffield Health Wellbeing Ltd and Cannons Group Ltd.

Background

The claim was for rent and other arrears by Oceanfill, the landlord of a gym in Leeds. It was brought against Nuffield, the original tenant and Cannons, the original guarantor under the lease.

Nuffield had assigned the lease to Virgin Active in 2000, guaranteeing the performance of Virgin Active as tenant and Cannons had given a guarantee of Nuffield's obligations.

Virgin Active restructuring plan 

The recent High Court decision in Re Petropavlovsk Plc [2022] EWHC 2097 (Ch) considers the interaction of UK insolvency procedure and the sanctions regime imposed on Russia. 

Background 

Administrators were appointed to the English holding company of Russian gold mining group, Petropavlovsk Plc, in July 2022. The holding company was not sanctioned but sanctions had affected its ability to refinance and to pay its debts as they fell due.

Following several insolvency cases of high-flying start-up companies, a helpful recent ruling by the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) has specified the requirements for going concern forecasts for start-up companies. 

Background 

In Re Swiss Cottage [2022] EWHC 1495 (Ch), junior creditors argued that administrators appointed to two companies had exceeded their powers and breached their duties when selling two properties.

Background

According to a ruling by the German Federal Court of Justice (BGH) on 5 May 2022, a passenger's claim for reimbursement due to a flight cancellation in insolvency needs to be established in the schedule of creditors, otherwise it remains a claim for air transport that cannot be enforced in insolvency proceedings if the flight was booked and paid for before the insolvency proceedings.

In Stratford Hamilton (joint liquidator of Mobigo Ltd (in liquidation)) v James Mcateer, Teresa Delgaudio [2022] the court dismissed the directors' application to strike out misfeasance claims against them. 

Background