On 29 October 2021, the UK Insolvency Service published its insolvency statistics for Q3 2021. Notably, the number of company insolvencies was 17% higher than in Q2 2021 and 43% higher than in Q3 2020. This was driven by an increase in company voluntary liquidations (CVLs) to the highest quarterly level for 12 years.

The UK government has lifted the current restrictions on statutory demands but imposed new temporary requirements for winding-up petitions presented from 1 October 2021 until 31 March 2022. The measures aim to protect companies from aggressive creditor enforcement as the economy opens up and other protections are lifted.

New requirements

The Court at first instance held that the Applicants failed to establish that the Company was insolvent. The key findings that informed the Associate Judge’s conclusions included the following:

• the funds that were available to the Company to pay its debts included funds in an offset account in the name of the director (and an account in the name of the director’s wife); and
• the Applicants’ claims were based on unreconciled accounts of the Company.

The Applicants were granted leave to appeal and appealed the decision of the Court a quo.

In a recent judgment, the English court refused to sanction a restructuring plan put forward by oil and gas producer, Hurricane Energy PLC.

Background

The Federal Court has clarified the ability of an assignee of a claim by a liquidator pursuant to s 100-5 of the Insolvency Practice Schedule to rely upon information and documents obtained from a public examination in private proceedings relating to the assigned claim: LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324.

Takeaways:

On 16 June 2021, the UK government announced that:

On 12 May 2021, in the first opposed cross-class cram down case, the English High Court sanctioned Virgin Active's restructuring plans, the first to bind landlords to lease compromises.

The decision

While the opposing landlords challenged the valuation evidence advanced by the companies, they did not advance evidence of their own. The court accepted the companies' evidence that:

On 17 May 2021, in the third of a trio of landlord challenge cases, the English High Court revoked Regis UK Limited's company voluntary arrangement (CVA) on one ground of unfair prejudice, but ruled against landlords seeking repayment of fees against the nominees.

The facts

On 10 May 2021, the English High Court rejected landlords’ challenge to the company voluntary arrangement (CVA) of fashion retailer, New Look. The New Look decision was the first in a trio of highly significant judgments focused on a distressed tenant's ability to compromise landlord's claims (our coverage of the Virgin Active and Regis decisions is available below).

The challenge

The landlords' challenge focused on jurisdiction, unfair prejudice and material irregularity as a result of the following:

On 24 March 2021, further extensions were announced to the range of government measures aimed at protecting UK companies and directors affected by COVID-19.

Measures extended to 30 June 2021