A recent Supreme Court decision serves as a reminder for directors to take specialist legal advice at an early stage to avoid potential liability
Managing a company’s business and making strategic and operational decisions is increasingly the subject of considerable internal and external pressures.
The Insolvency Service, has recently used its new powers to disqualify three former directors for dissolving their companies.
The Corporate Insolvency and Governance Act 2020 (“CIGA”) introduced a series of temporary and permanent measures to the armoury of rescue and restructuring mechanisms in the wake of the COVID-19 pandemic and the ensuing financial upheaval.
Present Position
Many individuals and businesses have experienced unprecedented challenges due to the restrictions imposed by the UK government in response to Covid-19. Significant reductions in income and, in some cases, temporary suspensions of trading have led to cashflow crises. Thanks to the government’s recent easing of restrictions, businesses in the hospitality, entertainment and holiday accommodation sectors have been able to re-open in accordance with the government’s safety guidelines.
As we are nearing the end of the Corporate Insolvency and Governance Bill’s passage through Parliament, it’s time to take a cautionary pause to consider its impact on the supply chain.
Attention has been primarily focussed on this Bill within the context of insolvency and corporate realms. However, those engaged in the supply of goods and services should be mindful of the changes on the horizon.
The Coronavirus Act 2020 came into force on 20 March 2020 and, under section 82, created a moratorium on commercial landlords forfeiting business leases for non-payment of rent, which remains in place.
On 23 April 2020, the government announced additional temporary restrictions on commercial landlords, referring to:
“High street shops and other companies under strain [being] protected from aggressive rent collection”.
Download this guide for commercial landlords from our property and insolvency team. This handy table sets out the enforcement options potentially available following the government’s emergency measures to combat COVID-19 whether or not the defaulting tenant has entered a formal UK insolvency procedure.
Landlord’s remedies on default by an insolvent commercial tenant
Over recent years I have been astounded that certain professionals, including accountants, insolvency practitioners (IPs) and solicitors, appear unable to recognise a conflict of interest if it were to stand up and slap them in the face.
Cynically, one could suggest that the blinkers have been on because it serves the interests of the professional concerned. Ignoring a conflict of interest is a fundamental breach of professional ethics, not something that can be brushed under the table for pure personal financial gain.
The collapse of the UK’s second largest construction company, Carillion, was not particularly surprising given recent profit warnings and debts believed to be in the region of £1.5 billion.
What happened to Carillion