In the recent case of TMG Brokers Ltd (In Liquidation) (also known as: Baker v Staines) the High Court held a director of a company to be jointly and severally liable for payments made by his co-director out of the company’s bank account which were made without proper authority and amounted to disguised distributions of capital. The fact that he had placed trust in the other director for the company's financial affairs did not excuse him from performing his duties.

Background

In what is likely to be the most significant change to the UK restructuring and insolvency market since the Enterprise Act 2002, the Court has paved the way for restructuring plans (RPs) under Part 26A to the Companies Act 2006 to be used to compromise the rights of landlords, financial creditors and other unsecured creditors provided the company shows that those creditors are “out of the money”.

If you thought the popularity of CVA's had been overshadowed by restructuring plans you might have to think again and watch what happens in the coming months. As you will know from the press there are a number of high-profile retail CVA's which are being challenged by landlords – New Look and Regis to name just two.

The fact that more businesses have not failed is the most surprising thing about the Covid-19 pandemic. However, if you look at the fashion retail sector alone, the list of some of the high profile casualties is alarming: Arcadia Group, Bonmarché, Debenhams, DW Sports, Laura Ashley, M&Co, Monsoon, Moss Bros, Oasis and Warehouse, Peacock and Jaeger, TM Lewin and Victoria’s Secret (UK Business)… with more expected.

Summary

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.

The National Security and Investment Act 2021 creates a new screening regime for transactions which might raise national security concerns in the UK. It passed into law on 29 April 2021 and is expected to come into effect by autumn 2021.

However, as the Act has retrospective effect from November 2020, insolvency practitioners need to understand the implications for insolvency sales taking place now. We have summarised the headline issues for insolvency practitioners below.

You need to consider the impact of this Act on transactions that are taking place now.

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.

An important judgment by Snowden J yesterday, sanctioning Virgin Active's restructuring plans after a contested sanction hearing, which included a cram down of several landlord classes that did not approve the plans by the requisite majorities in those classes.

The decision is important as among the many points covered, it considers certain key issues including:

Few things go together as naturally as fraud and insolvency. The pattern is now well rehearsed: scams pile up unnoticed while money flows in the good times, but when recession hits, increased scrutiny from lenders, counterparties and the tax man – not to mention insolvency practitioners – means fraud is far more likely to be discovered.

Christopher Buckingham acted for the Secretary of State in Re Javazzi Limited (in liquidation) [2021] EWHC 1239 (Ch).