The £150 million judgment makes clear the full impact of the trading misfeasance offence for directors.

FRP Advisory Trading Limited won the United Kingdom's largest-ever wrongful trading claim and successfully established the first "misfeasance trading" claim against former directors of British Home Stores ("BHS"), highlighting the critical responsibilities of directors managing financially troubled company assets.

On January 23, 2024, the Court of Appeal in England and Wales (the "Appeal Court") upheld a challenge launched by dissenting creditors to overturn the UK Restructuring Plan (the "RP") of the Adler Group previously approved by the High Court under Part 26A of the Companies Act 2006 (Strategic Value Capital Solutions Master Fund LP and others v AGPS BondCo PLC [2024] EWCA Civ 24).

In Short

In Short

The Situation: Directors in England and Wales owe duties to the companies to which they are appointed (and may face personal liability for breaching such duties). Although the Companies Act 2006 obliges directors to maximise value for a company's shareholders, case law has suggested that directors should act in the interests of a company's creditors if a company becomes distressed.

In Short

The Situation: As businesses continue to grapple with realising the value of business and assets which are potentially impacted by sanctions related to Russia's war in Ukraine, an English company recently utilised an insolvency process to seek court approval for a proposed divestment.

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:

In Short

Pre-pack sales have long been criticized by certain stakeholders for allowing the phoenix to rise from the ashes having shed its liabilities. However, they remain a popular restructuring tool, and given the current economic climate, we are likely to see an increased number of pre-pack insolvency sales in the next few years. In brief, a pre-pack sale involves the marketing of a business prior to its insolvency and the sale of the business and assets of the company by an insolvency practitioner immediately following his or her appointment.