The English High Court has sanctioned the restructuring plans proposed by the Virgin Active group following a hearing contested by a group of the gym chain's landlords. The decision represents the first use of the restructuring plan procedure, introduced during the summer of 2020, to restructure a lease portfolio, demonstrating the utility of the tool for debtors when implementing a significant restructuring across the capital structure, and as an alternative to the much-used company voluntary arrangement.

Introduction

Introduction – the framework

Law 3/2020, of 18 September, on procedural and organisational measures to tackle COVID-19 in the area of the Administration of Justice entered into effect on 20 September 2020.

The new insolvency and corporate measures are brought in with three primary aims:

El pasado 20 de septiembre de 2020, entró en vigor la Ley 3/2020, de 18 de septiembre, de medidas procesales y organizativas para hacer frente al COVID-19 en el ámbito de la Administración de Justicia.

Según se establece, estas nuevas medidas concursales y societarias se llevan a cabo con una triple finalidad:

The Corporate Insolvency and Governance Act 2020 (“CIGA“) ushered in a flexible restructuring compromise or arrangement for companies in financial difficulty (the “Restructuring Plan“). The legislation governing the Restructuring Plan sits alongside that for schemes of arrangement and is included in a new Part 26A to the Companies Act 2006.

The Restructuring Plan does not apply to companies that are solvent with no risk of insolvency; rather it only applies to companies where two conditions have been satisfied:

El pasado día 1 de septiembre entró en vigor el Real Decreto Legislativo 1/2020, de 5 de mayo, por el que se aprueba el texto refundido de la Ley Concursal (TRLC). De este modo, la Ley 22/2003, de 9 de julio, Concursal queda derogada casi en su totalidad.

Según se establece en el Preámbulo del TRLC, este texto refundido se ha creado ante la imprescindible necesidad de reordenación, clarificación y armonización tanto de la Ley Concursal como de las normas que con rango de ley que modificaron la misma.

Royal Legislative Decree 1/2020, of 5 May, which approves the Recast Spanish Insolvency Law (Texto Refundido de la Ley Concursal, or TRLC) entered into effect on 1 September. As a result, the former Insolvency Law 22/2003, of 9 July, has been derogated almost in its entirety.

According to the TRLC’s Preamble, Spanish insolvency legislation has been amended given the need to reorder, clarify and harmonise the former Insolvency Law and the provisions that have since amended it.

The Corporate Insolvency and Governance Act 2020 is far-reaching with its implications extending to pension schemes. Pension scheme employers and trustees should ensure that they are familiar with the provisions of the Act, and the potential impact that they could have on schemes, employers and savers.

Introduction

The Act received royal assent on Thursday 25 June. The Act passed through Parliament very quickly, so that its provisions can be used by companies experiencing financial difficulty as a result of the COVID-19 pandemic. The Act contains: