As the UK emerges from the COVID-19 pandemic, the domestic construction industry can look forward to a bright but challenging future. Mortgages are at record lows; housing demand remains high and the wider economy is in optimistic mood. However, businesses are experiencing challenges associated with sourcing raw materials, staff shortages and the prospect that more companies will likely fail as government business support measures tail off.
A bill currently making its way through parliament is intended to enable increased scrutiny of the actions of directors of dissolved companies – and discourage the abuse of the voluntary strike-off procedure as an ‘alternative’ to insolvency proceedings. The measures relating to dissolved companies in the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (the “Bill”) have been contemplated for some time, originally raised in the government’s consultation on insolvency and corporate governance in 2018 (the “2018 Consultation”).
Back in July, Craig Eller wrote in The Bankruptcy Protector about the continuing confusion amongst courts and litigants regarding the applicability of a 2018 increase in fees payable to the Office of the United States Trustee in chapter 11 cases.
Insolvency proceedings are typically launched by an administrator or liquidator during an insolvency process. The nature of modern insolvency litigation, including the market for assigning causes of action to third parties, has somewhat muddied the waters on how and where to commence proceedings. Two recent cases provide some valuable insight into the High Court’s approach.
Rogue directors will find themselves in the firing line if and when The Rating (COVID-19) and Directors Disqualification (Dissolved Companies) Bill, which is currently making its way through parliament, comes into force. The proposed bill will enable the investigation and potential disqualification of directors of dissolved companies, and responds in particular to concerns around COVID-related fraud.
Background
The past week has been frustrating for landlords, with the High Court rejecting a landlord challenge to New Look’s CVA (Lazari Properties 2 Ltd and others v New Look Retailers Ltd and others [2021] EWHC 1209 (Ch)) and days later sanctioning Virgin Active’s restructuring plan (Re Virgin Active Holdings Ltd and others [2021] EWHC 1246 (Ch)).
The Insolvency Service published its quarterly insolvency statistics for the period January to March 2021 (Q1 2021) on 30 April 2021. By way of comparison, see our previous update on the Q4 2020 statistics here.
The published statistics for the first quarter of 2021 continue the downward trend seen in the previous 12 month period, with company insolvencies falling overall by 22% from the previous quarter.
As the UK slowly emerges from the second wave of the COVID-19 pandemic, the government has announced the further extension of the duration of certain temporary measures initially introduced pursuant to the Corporate Insolvency and Governance Act 2020 (CIGA).
On 24 February 2021, the government published new draft Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the Regulations), following the consultation process conducted in late 2020. The Regulations are still to be debated by Parliament, but are expected to come into effect on 30 April 2021 with few substantive amendments.
In Uralkali v Rowley and another [2020] EWHC 3442 (Ch), the High Court has confirmed the position in relation to the duties that officeholders owe to third parties involved in the sale process of a business and assets out of an insolvent estate.