The recent High Court decision in Hellard & Anor v Registrar of Companies & Ors [2020] EWHC 1561 (Ch) (23 June 2020) serves as a useful reminder to any party seeking the restoration of a company to the Register of Companies that it is important first to consider whether such party has the requisite standing to make the application.
The first half of 2020 saw a wave of company voluntary arrangements (CVAs) as companies explored their restructuring options against the backdrop of a darkening economic outlook.
On June 22, U.S. Circuit Judge Judge Jerry Smith issued a short, three-page opinion in the case Hidalgo County Emergency Service Foundation v. Carranza that appeared, at first blush, to be a death blow to many debtors' ability to obtain Paycheck Protection Program, or PPP, loans under the Coronavirus Aid, Relief and Economic Security, or CARES, Act.
Suppliers can no longer terminate contracts, refuse to supply goods or services or amend payment terms with an insolvent customer due to its insolvency, save in limited circumstances. The new rules - brought in by the Corporate Insolvency and Governance Act 2020 (“CIGA”) - governing protection of supplies significantly restrict parties’ autonomy in relation to customer insolvency and will be a cause of concern for many suppliers.
New protection of supplies to insolvent companies
The United States Court of Appeals for the Fifth Circuit has dealt a blow to debtors seeking Paycheck Protection Program (“PPP”) loans under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). In a decision entered on Monday, June 22, Judge Jerry Smith issued a short, three-page opinion in the case Hidalgo County Emergency Service Foundation v. Jovita Carranza (In re Hidalgo County Emergency Service Foundation) that could have long-lasting ramifications for many debtors, both in and outside of the Fifth Circuit.
In his judgment handed down on 7 May 2020 in the case of Gregory v ARG (Mansfield) Ltd [2020] EWHC 1133 (Ch), HH Judge Davis-White QC, sitting as a Judge of the High Court, commented (on an obiter basis) that where a company regulated by the Financial Conduct Authority (the “FCA”) seeks to enter administration, section 362A of the Financial Services and Markets Act 2000 (“FSMA 2000”) and paragraph 29 of Schedule B1 of the Insolvency Act 1986 (the “Insolvency Act”), require that writ
On 20 May 2020, the Corporate Insolvency & Governance Bill 2019-2021 was introduced to Parliament. With the Bill slated to be fast-tracked into law, here are some of the key insolvency aspects to be aware of.
Why now?
The extraordinary disruption to UK business caused by the COVID-19 lockdown has spawned much discussion about changes to existing insolvency laws to help businesses which are struggling to survive in this abnormal environment. One topic of discussion has been the so-called ‘light touch’ administration. Here we provide a quick overview of what this involves.
What do we mean by a ‘light touch’ administration?
One of the landmark protections enacted by the Coronavirus Aid, Relief and Economic Security, or CARES, Act on March 27 was the Paycheck Protection Program, or PPP. Under the program, small businesses (e.g., those with fewer than 500 employees) — and certain other businesses in specific industries — are eligible to receive loans that will be fully forgiven if utilized under the terms of the program, including applying at least 75% of the funds received from the loans to payment of payroll expenses.
One of the landmark protections enacted by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was the Paycheck Protection Program (“PPP”). Under the PPP, small businesses (businesses with fewer than 500 employees) are eligible to receive loans that will be fully forgiven if utilized under the terms of the Program, including applying at least 75% of the loans to payroll. The loans may also be used for payment of interest on mortgages, rent, and utilities. The PPP loans are capped at $10 million for each small business.