• Commercial rent arrears continue to accumulate as a result of the pandemic, such that arrears are estimated to reach £9 billion by March 2022 and comprise a much larger slice of the typical debt stack than they did pre-pandemic.
• The UK government has proposed a binding arbitration scheme to help resolve the arrears and further extend the existing protections from enforcement and insolvency procedures that

• Brexit ripped up the rules on automatic cross-border recognition of formal insolvency proceedings and restructuring tools between the UK and the EU.
• Recognition will now depend on a patchwork of domestic legislation, private international law and treaties and may lead to different outcomes depending on the jurisdiction.
• Cross-border recognition is still achievable but involves careful navigation and a more tailored approach in individual cases to selection of the most effective process and its route to recognition.

Legal landscape

The consequent distress in the market is evident with 9 supplier insolvencies in the last few weeks alone, including Avro Energy, Utility Point and People’s Energy.

Today, 1 October 2021, is important as Ofgem is due to increase tariff caps from that date. This is also the date when the restrictions on petitioning for the winding up of companies on the basis of insolvency will be eased.

Legal landscape – energy regulations

In distressed situations, there are a number of issues to navigate, including:

Removal of requirement for sanction

Previously under section 165 IA 86, liquidators in a voluntary winding up would have to seek sanction of the company (in members’ voluntary liquidation) or of the court or liquidation committee (in creditors’ voluntary liquidation) in order to exercise their powers to pay debts, compromise claims etc. SBEEA removes this requirement so that liquidators can exercise those powers freely. This will aid expeditious winding up of companies. Equivalent provisions have also been put into place for trustees in bankruptcy.