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

In a recent decision in the Admiralty Court before Mr Admiralty Registrar Davison, the Court considered the application of the recently enacted section 233B of the Insolvency Act 1986. Whilst the conclusions reached on that provision are perhaps less surprising given its wide remit, the decision raises some interesting points for contract lawyers on the formation of contracts and the reasonableness of their terms.

Introduction – Section 233B of the Insolvency Act 1986 (Act)

While announcements have been made, and measures extended, to help corporate Britain, directors faced with the difficult decision of whether to trade on through the crisis could suddenly very exposed once again.

In several Commonwealth jurisdictions, the corporate legislation allows creditors to petition a court to order the winding up of a debtor in circumstances where that debtor is unable to pay its debts as they fall due. Such legislation generally presumes that the debtor is insolvent if it has failed to comply with a statutory notice requiring the debtor to pay a certain debt within a given period of time (a statutory demand).

On 26 June 2020, the Corporate Insolvency and Governance Act 2020 (the "CIGA") came into effect. As anticipated in our previous article the CIGA was fast-tracked through Parliament and some amendments were ultimately made prior to it becoming law.

The decision of Mr Justice Morgan in A Company (Injunction To Restrain Presentation of Petition) [2020] EWHC 1406 (Ch) (judgment anonymised) which was handed down on 2 June 2020 will be of interest to tenants and landlords alike in the current climate. The judgment, which follows the decision in Travelodge Ltd v Prime Aesthetics Ltd [2020] EWHC 1217 (Ch) will be of huge precedent value to commercial tenants that have been impacted by coronavirus and have been unable to meet their rent obligations as a result.

Following the Government's announcement in March that the hotly anticipated changes to the UK's insolvency regime would be rushed through Parliament with further, temporary, provisions to mitigate the impact of COVID-19, insolvency practitioners and business professionals alike have been awaiting further clarity on what the Business Secretary's comments mean for businesses both in the current climate and more generally.

As businesses seek to adapt to deal with the financial impact of COVID-19, boards of directors have been faced with the difficult decision of having to file for insolvency or take steps to preserve business continuity and live to fight another day. Understandably directors' duties is a topic that has come keenly into focus with directors wishing to ensure that, whatever steps they take, they do not incur personal liability.

On 2 March 2018, the Hong Kong Court of First Instance (“CFI“) issued a notable decision which signifies a development of Hong Kong law in the contexts of insolvency and arbitration. The CFI held in Lasmos Limited v Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426 that a winding-up petition issued on the ground of insolvency should generally be dismissed if there is an arbitration clause contained in an agreement giving rise to a debt relied on to support the petition.