Virgin Active has been in the news recently, as it has proposed restructuring plans which rely on the new legislation found in the Corporate Governance and Insolvency Act 2020.

In this insight, we will explain:

Alex Jay writes for Accountancy Daily on various scenarios for companies looking to restructure their office space in the wake of the pandemic and subsequent re-evaluation of the use of office space.

On 26 March 2021, Mr Justice Zacaroli of the English High Court sanctioned a restructuring plan (the Plan) proposed by gategroup Guarantee Limited (Gategroup), following approval at two creditors' meetings convened pursuant to a judgment handed down by Mr Justice Zacaroli on 17 February 2021.

Additional conditions will be imposed on administrators seeking to dispose of a company’s business or assets to a party connected to the insolvent company within 8 weeks of their appointment, for administrations beginning on or after 30 April 2021. 

Summary

Affected sales will be subject to either (1) prior creditor approval or (2) prior review by an independent evaluator. 

Christopher Loxton has written an article on the mutual recognition and enforcement of insolvencies in the EU post-Brexit.

The Court of Appeal has struck out Quincecare duty and dishonest assistance claims brought by the liquidators of a company operating a Ponzi scheme against a correspondent bank that operated various accounts for the company.

Almost a year has now passed since the Corporate Insolvency and Governance Act 2020 (CIGA) first entered force on 26 June 2020. According to the Explanatory Notes that accompanied CIGA, “the overarching objective of [the Act] is to provide businesses with the flexibility and breathing space they need to continue trading during this difficult time”. To this end, CIGA introduces a number of permanent and temporary amendments to the UK’s insolvency landscape which are aimed at ensuring businesses can maximise their chances of survival against the backdrop of the COVID-19 pandemic. 

A balancing act

Creditors with legitimate grounds to challenge scheme or restructuring plan proposals and who assist the court in so doing should not be unduly discouraged by the costs regime. At the same time, frivolous arguments should not be supported with the promise of a costs award without consideration of party’s interests and other factors.

Virgin Active restructuring plans

The impact of Covid-19 has been felt across the commercial property sector; nowhere more acutely, perhaps, than in "bricks and mortar" retail and hospitality.

Even pre-pandemic, the high street was being forced to adapt to the growth of eCommerce. But consecutive lockdowns have expedited the shift; for some, that change will be irreversible.

The Court of Appeal has struck out Quincecare duty and dishonest assistance claims brought by the liquidators of a company running a Ponzi scheme against a correspondent bank that operated various accounts for the company.