How do you improve the image of company voluntary arrangements? Start by reforming the voting rules.

The company voluntary arrangement (CVA) is an insolvency process that has raised significant concern amongst commercial property owners in recent years about their use by tenant companies to change lease terms, write off arrears and recalculate future rental liabilities. Some property owners feel that they have been unfairly targeted by CVAs, particularly in the retail and casual dining sectors, to the benefit of other creditors.

The Bankruptcy Code confers upon debtors or trustees, as the case may be, the power to avoid certain preferential or fraudulent transfers made to creditors within prescribed guidelines and limitations. The U.S. Bankruptcy Court for the District of New Mexico recently addressed the contours of these powers through a recent decision inU.S. Glove v. Jacobs, Adv. No. 21-1009, (Bankr. D.N.M.

The High Court has dismissed an application by a landlord creditor to overturn a company voluntary arrangement (CVA) implemented by coffee shop chain Caffé Nero. The CVA, previously approved by its creditors, compromised rent arrears and reduced future rents for the company's premises. The decision follows a series of previous high-profile challenges to retail and leisure CVAs.

The UK Government yesterday announced that it will proceed with the phasing out of temporary measures introduced to protect businesses from creditor action during the COVID-19 pandemic, whilst also announcing new measures to protect smaller businesses from winding up petitions. The legislation required to implement these amendments was laid before Parliament yesterday and will come into force on 29 September 2021.

National Car Parks' proposed restructuring plan aimed to write-off arrears, cut rents and close unwanted sites but why did the plan stall?

On 30 April 2021, National Car Parks launched its proposed restructuring plan, which is the flagship new restructuring process introduced last June through the Corporate Insolvency and Governance Act 2020. Around a dozen restructuring plans have come to market so far, but the NCP plan was only the second (the first being Virgin Active) to involve landlord creditors.

The government has finally come up with proposals to reform pre-pack administrations, requiring independent scrutiny of sales to connected parties, as Mathew Ditchburn explains.

In 2015, responding to mounting concerns about pre-pack administration sales, a set of voluntary industry measures were introduced to address the perceived lack of transparency and trust in the process – especially when the sale was to a connected party, like a director or shareholder of the company in administration.

In In re Smith, (B.A.P. 10th Cir., Aug. 18, 2020), the U.S. Bankruptcy Appellate Panel for the U.S. Court of Appeals for the Tenth Circuit recently joined the majority of circuit courts of appeals in finding that a creditor seeking a judgment of nondischargeability must demonstrate that the injury caused by the prepetition debtor was both willful and malicious under Section 523(a)(6) of the Bankruptcy Code.

Factual Background

In a recent decision, the U.S. Bankruptcy Court for the Southern District of New York held that claim disallowance issues under Section 502(d) of the Bankruptcy Code "travel with" the claim, and not with the claimant. Declining to follow a published district court decision from the same federal district, the bankruptcy court found that section 502(d) applies to disallow a transferred claim regardless of whether the transferee acquired its claim through an assignment or an outright sale. See In re Firestar Diamond, 615 B.R. 161 (Bankr. S.D.N.Y. 2020).