Building on measures already introduced in the Coronavirus Act – such as the moratorium on lease termination for non-payment of rent until 30 June 2020 – the Government announced that further emergency measures will be introduced.

Statutory demands and winding up petitions issued to commercial tenants to be temporarily voided

The forthcoming Corporate Insolvency and Governance Bill will include restrictions on the use of statutory demands and winding up petitions to recover sums owed by tenants.

Key Points

• There is a low threshold for the granting of an injunction to prevent the presentation of a winding up petition.

• The challenge against the debt in the statutory demand must be in good faith and have sufficient substance.

The Facts

In Rushbrooke UK Ltd (the Company) v Designs Concept Ltd (Designs) [2022] EWHC 1110 (Ch), the Court struck out injunction proceedings to restrain the presentation of a winding up petition as the instructing director did not have Company authority.

Background

An intention to transfer is not sufficient to claim lost property

In Arlington v Woolrych, the failure by a junior creditor to gain the prior written consent of senior creditors pursuant to a Deed of Priority rendered the appointment of administrators invalid.

Facts

Alongside the permanent reforms to English insolvency law introduced by the Corporate Insolvency and Governance Act 2020, the government introduced a temporary suspension of certain provisions of the Insolvency Act 1986 (the IA) to address the economic turbulence caused by the COVID-19 pandemic.

What is CBILS?

CBILS is a government backed loan scheme to provide financial support to small and medium businesses (SMEs) across the UK that are experiencing financial difficulties as a result of the COVID-19 outbreak. The scheme opened on 23 March 2020 and will run for an initial period of 6 months.

The scheme is delivered by accredited commercial lenders, backed by the government-owned British Business Bank (the BBB).

Key Points

• A binding contract by exchange of email did not arise where parties were simply exploring a potential deal.

• Sale by auction is often appropriate where an asset is difficult to value.

• Where no differential treatment of creditors, unfair harm requires that a decision does not withstand logical analysis.

The Facts

The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.

Background

At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.

Sanction hearing

Insolvency practitioners and buyers of distressed assets beware: although the National Security and Investment Act 2021 (NSI Act) will come into effect in the UK on 4 January 2022, it has retrospective power to examine transactions from 12 November 2020.

Mandatory notification