In Minor Hotel Group MEA DMCC v Dymant & Anor [2022] EWHC 340 (Ch), is the first reported High Court decision considering a contested moratorium since the new Part A1 moratorium ("moratorium") was introduced in 2020, in which the monitors successfully opposed an application by the parent company's secured creditor to remove the monitors and end the moratorium.
In brief
With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.
CVAs are a useful tool in the restructuring tool kit, and may prove extremely helpful to retailers or hospitality companies as a means of supporting those businesses as they emerge from the pandemic. The flexibility of a CVA and the ability to shape the terms of a proposal to meet the specific needs of a business have seen an increasing number of consumer led businesses use CVAs, and they have become popular as a means to restructure businesses that have a significant lease portfolio.
Following our previous alert that considered rent reductions and modifications to lease terms post New Look and Regis, this alert considers what those CVA challenge cases tell landlords about calculating a landlord's claim for voting purposes and the disclosure requirements.
From 30 April 2021, an administrator will be unable to complete a sale of a substantial part of a company's property to a connected person within the first eight weeks of the administration without either:
- The approval of creditors
- An independent written opinion (positive or negative)
This alert considers the impact of the new regulations in practice, which apply to both pre-packs and post-packs that take place within eight weeks of an administrator's appointment.
When is an evaluator's report required?
From 30 April 2021, an administrator will be unable to complete a sale of a substantial part of a company's property to a connected person within the first eight weeks of the administration without either:
- The approval of creditors
- An independent written opinion (positive or negative)
This alert considers the impact of the new regulations in practice, which apply to both pre-packs and post-packs that take place within eight weeks of an administrator's appointment.
In brief
Introduction
Background to the case
The Company's case for appointing an examiner
The controversy
The decision
The implication for use of CVAs in England
In the third (and final) of our blog series on recent CVA cases, in Rhino Enterprises Properties Ltd & Anor [2020] EWHC 2370 (Ch), the High Court gave permission for misfeasance proceedings to be brought against two former joint administrators. This was despite an approved Company Voluntary Arrangement (“CVA”) containing a clause releasing the joint administrators from liability.
Increasing pressures placed on those operating in the retail and hospitality sectors as a result of COVID-19, means there is likely to be an increasing use of CVAs in these sectors. The intention would be to help support and restructure businesses in distress, but could retailers use a CVA as a mechanism to re-write the terms of its leases?