In figures released on Friday 28 July 2023 from the Insolvency Service, the total number of registered company insolvencies in England and Wales during Q2 2023 was 6,342, the highest since Q2 2009 and up by 9% compared to Q1 2023. The construction industry was again the hardest hit (a trend going back over a decade). Whilst more construction companies went into administration during Q2 compared to Q1, significantly higher numbers went quietly into liquidation during the same period, at an average rate of around 11 per day.

The construction industry trade press frequently writes about administrations in the industry. Whilst the Insolvency Service's figures show that around one construction company went into administration every other day in Q1 2023, significantly higher numbers went quietly into liquidation during the same period.

Each week we are seeing stories in the news about construction companies becoming "insolvent", going into "liquidation" or having "administrators" appointed. But what do these terms mean? Insolvency is a complex area of law with its own terminology, so we've broken down what all the terms mean below.

What is insolvency and what happens to a company when it is insolvent?

Further to our previous article, which can be found here, we consider the key issues with which the Court faced, the technical legal analysis underpinning this judgment and our view on what this may mean for energy suppliers, and the sector as a whole, looking forward.

Background - what was the application and why was it needed?

The long, long awaited Supreme Court Judgment in the Sequana case is finally here. Firstly, for those who may have forgotten what the Supreme Court was grappling with, the issue was 'whether the trigger for the directors’ duty to consider creditors is merely a real risk of, as opposed to a probability of or close proximity to, insolvency'. 

Wirecard's insolvency administrator has won a first victory before the Munich I Regional Court. On 5 May, the court declared the annual financial statements for 2017 and 2018, which show balance sheet profits totalling around EUR 600 million, null and void. Dividends of around EUR 47 million were distributed to Wirecard's shareholders from these profits, which probably never existed. As a consequence of the nullity of the annual accounts, the resolutions on the utilisation of the balance sheet profits are also null and void.

Die anhaltenden Auswirkungen der Covid-19-Pandemie auf die Hotelbranche und eine mögliche Restrukturierungsoption

Über zwei Jahre nach Ausbruch der Covid-19-Pandemie sind deren Auswirkungen auf die deutsche Wirtschaft immer noch deutlich spürbar. Insbesondere die Hotelbranche ist von der sogenannten 4. Welle, den derzeitigen Rekordinzidenzen sowie den damit verbundenen staatlich angeordneten Einschränkungen wie 2G (Plus)- bzw. 3G-Regelungen weiterhin stark betroffen.

At the start of the coronavirus pandemic, temporary provisions were put in place under the Corporate Insolvency and Governance Act 2020 ("CIGA") to allow businesses impacted by the COVID-19 pandemic breathing space from the threat of winding up action. Those restrictions will expire on 30 September 2021.

In the hotly anticipated judgment of Mr Justice Zacaroli in the case of Lazari Properties 2 Limited and Ors and New Look Retailers Limited ("New Look") [2021] EWHC 1209 (Ch) New Look has successfully defended a challenge to its CVA on the grounds of jurisdiction, material irregularity and unfair prejudice. The judgment confirms once again that differential treatment of creditors does not on its own establish unfair prejudice but that it will be a matter for determination based on all the circumstances of the case.

The new pre-pack regulations have been approved by Parliament and come into force on 30 April 2021.

Pre-packs: an overview