The UK's latest quarterly company insolvency statistics, published on 30 April, show that insolvency rates remain significantly below pre-pandemic levels, demonstrating the continued success of Government measures in preventing a COVID-19 related wave of insolvencies.
The economic uncertainty for companies caused by the Covid-19 pandemic has placed a heavy burden on directors. That burden of responsibility is set to become even heavier as the temporary measures introduced in 2020 to support companies during the pandemic come to an end. Small and medium sized enterprises (“SMEs”) and those businesses operating in the travel, hospitality, leisure and manufacturing industries have been impacted in particular.
On 23 March 2021, the 2011 sale of the One Blackfriars development site in London by administrators was cleared of misfeasance by the High Court, in Re One Blackfriars Ltd [2021] EWHC 684 (Ch).
In a £250 million claim, the company's liquidators had alleged that the former administrators had breached their duties by failing to act independently of the banking syndicate which appointed them, failing to properly assess the value of the site, and selling the site at an undervalue.
Here, we recap the facts of the case and outline the key takeaways to consider.
On 30 April 2021, reforms to the UK’s regime governing sales in administration by way of a ‘pre-pack’ to a connected party purchaser came into force.
The centrepiece of the reforms is a new requirement for a connected party purchaser to obtain an opinion from an independent ‘evaluator’ on whether the terms of the sale are reasonable.
While the reforms add additional process points that must be navigated in relevant cases, they will bring improved transparency to an important rescue tool which has, at times, attracted warranted criticism.
WWRT Limited v Tyshchenko & Tyshchenko [2021] EWHC 939 (Ch)
Judgment date: 21 April 2021 (Bacon J)
Overview
When used correctly, pre-pack administrations can be an effective means of creating an opportunity for the rescue of an insolvent business. However, concerns are regularly expressed about the lack of transparency in the sale process and the potential for poor outcomes for unsecured creditors, particularly where a disposal involves connected parties. These concerns have been exacerbated by some unfavourable media reports about a limited number of high-profile cases, and the speed at which transactions are often required to take place in order to preserve value and jobs.
The merger of Premier Oil plc (“Premier”) and Chrysaor Holdings Limited (“Chrysaor”) completed on 31 March 2021, with Premier’s shares being readmitted to trading the following day under the new name of Harbour Energy plc. Harbour Energy is now the largest independent oil and gas company listed on the London Stock Exchange with combined production of over 250 kboped.
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.