Although the Sunbird scheme of arrangement was approved by the relevant creditors, sanction was refused by Mr. Justice Snowdon, who highlighted:

• a ‘paucity of information provided by the company as part of the scheme process’, and
• a failure to engage with creditors ‘whom the directors clearly felt were irrelevant or would be an obstacle to their plans’.

He remarked that the company’s approach 'fell a considerable distance short of what was required for a fair process'.

Despite commentators’ recent focus on the new Part 26A restructuring plan, introduced in late June by the Corporate Insolvency and Governance Act 2020, the scheme of arrangement under Part 26 of the Companies Act 2006 (“scheme”) remains a popular tool for companies to reach a compromise or arrangement with their creditors and/or its members.

In an important decision issued at the end of August, the United States Court of Appeals for the Third Circuit, in In re Tribune Co., Case No. 18-2909 (3d Cir. Aug. 26, 2020), held that subordination agreements need not be strictly enforced when confirming a chapter 11 plan pursuant to the Bankruptcy Code’s cramdown provision in section 1129(b)(1). In its decision, the Third Circuit also encouraged bankruptcy courts to apply “a more flexible unfair-discrimination standard” and set forth eight guiding principles to aid in that effort.

New Look's unsecured creditors today approved a company voluntary arrangement that will amend 402 store leases to a turnover rent model, reflecting recent movements in the market towards more flexible lease obligations.

Despite opposition from many landlords, and considerable disquiet in the property industry, it is clear that tenants remain open to using the CVA process to restructure their leases, as a means to address the impact of the COVID-19 pandemic.

Introduction

Virgin Atlantic announced yesterday its plans for a recapitalisation, worth approximately £1.2 billion over the next 18 months. Support has already been secured from the majority of stakeholders.

However, to secure approval from all relevant creditors before implementation, Virgin Atlantic plans to use the new 'restructuring plan' as introduced by the Corporate Insolvency and Governance Act 2020 (CIGA), which came into force late last month.

The Corporate Insolvency and Governance Act (the ‘CIGA’), which came into force on 26 June 2020, introduces the most significant changes to English insolvency law in a generation. In this article, we explore those changes in a ‘question and answer’ format.

At a glance – what has changed?

The CIGA has introduced permanent changes to English legislation that will ensure that England & Wales remains at the forefront of the global restructuring market. These measures are:

In a recent decision, In re Philadelphia Entertainment and Development Partners, L.P., No. 14-000255-mdc (Bankr. E.D. Pa. Dec. 31, 2019), the Bankruptcy Court for the Eastern District of Pennsylvania held that state sovereign immunity does not prevent bankruptcy courts from hearing fraudulent transfer claims against states.

On January 13, 2020, the United States Bankruptcy Court for the District of Delaware issued an opinion in In re La Paloma Generating Company, LLC., Case No. 16-12700 [Adv. Pro.

The United States Supreme Court has granted certiorari on an issue that has greatly divided Circuit Courts of Appeal – the question of whether an entity that retains possession of a debtor’s property has an affirmative obligation to return that property to the debtor or trustee immediately upon the filing of the bankruptcy petition or risk being in violation of the automatic stay.