1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

What should you do if another business (i.e. a supplier, customer or other contract counterparty) is suffering distress and may be considering filing for insolvency?

This alert provides several “do’s” and “don’ts” to consider before and after insolvency and advises taking a proactive approach to dealing with distressed customers.

We previously considered the potential implications for insolvency professionals of the rise of cryptocurrencies (available here). One of the principal issues identified was the uncertainty surrounding the legal status of cryptocurrencies; what class of asset were they and, subsequently, how would they be treated under English law?

The Government announced an independent review of HMRCs loan charge in September 2019. In this blog we consider the effect of the review on directors who have or are settling claims with HMRC and highlight that the review does not impact on potential claims against directors of insolvent businesses.

Regardless of the outcome of the review, employee benefit trusts (“EBT”) which are not legitimate, are still tax avoidance schemes.

In a recent report by INSOL International, only 5% of insolvency practitioners (“IPs”) said that they had a “comprehensive or practical/working or understanding” of crypto-currency.

So with over 4,000 types of cryptocurrency now available and as payment technology continues to develop, we look at some issues facing IPs, including

• • How to identify cryptocurrency
  • How to categorise it
  • How to take control of it and sell it; and
  • What value does it have

What are cryptocurrencies?

Due to the introduction of new tax legislation on 6th April 2016, distributions made to shareholders of companies undergoing Members’ Voluntary Liquidation (MVL) are now treated as income (rather than capital) and are taxed accordingly.