Landlords might be starting to feel a little uneasy given the news that Superdry is considering a Company Voluntary Arrangement (CVA). Superdry is reportedly working with accountants to hash out a plan that will likely involve shutting down certain stores and cutting rent liabilities. The accountants instructed will be exploring whether either a CVA or a Restructuring Plan - both of which are processes which allow businesses to seek to reduce their liabilities to creditors – would be appropriate.
What exactly is a CVA?
Once a tenant becomes insolvent a landlord's recovery options become more limited but there are important steps a landlord should be taking.
1. Check the terms of any rent deposit agreement
Check the terms of the arrangement to find out how the deposit is held and when it is available for to use. In some cases, such as when a tenant has entered into a creditors' voluntary agreement, consent from the court may be required before the deposit can be used.
2. Find out the tenant's status
Do landlords do get a good deal in CVAs? It would seem they do (if you don't read the small print…)
A few weeks ago we blogged that we were expecting RSM's research report, which was commissioned by the Insolvency Service, into the impact of CVAs on the landlords. The specific question in the research paper was: "are landlords equitably treated, compared to other creditors in large business CVAs?".
'Chapter 11 bankruptcy', the US insolvency regime, often features in the UK headlines. When Lehman Brothers filed under Chapter 11 in 2008, it marked the start of the global financial crisis. Chapter 11 (which refers to part of the US Bankruptcy Code) is a restructuring tool designed to rescue companies. Its closest UK counterpart is Administration, under Schedule B1 to the Insolvency Act 1986.
The UK Government has announced new laws to enhance the scrutiny and transparency of pre-pack administrations.
What are pre-pack administrations?
A pre-pack administration is when the sale of a distressed company and its assets is negotiated before, or shortly after, the appointment of administrators.
The Corporate Insolvency and Governance Bill was finally introduced to Parliament on 20 May. It is now clear that the provisions of the Bill relating to statutory demands and winding up petitions will apply to Scotland without the need for the Scottish Government to pass further legislation.
Statutory demands
El pasado miércoles 27 de mayo de 2015 se produjo la entrada en vigor de la Ley 9/2015, de 25 de mayo, de medidas urgentes en materia concursal. Se termina así el proceso de conversión en Ley del Real Decreto-Ley 11/2014, de 5 de septiembre (ver e-bulletin publicado).
Act 9/2015, of 25 May, regarding urgent measures on insolvency, entered into force in Spain on 27 May 2015, thus concluding the process to give Royal Decree Law 11/2014, of 5 September, the status of an Act in its own right (see published e-bulletin).
On Friday 5 September, the Spanish Council of Ministers approved Royal Decree Law 11/2014, of 5 September, regarding urgent measures on insolvency. The Royal Decree Law brings in a series of significant reforms to the Spanish Insolvency Act 22/2003, of 9 July (the "Insolvency Act"). The new Royal Decree Law entered into force on 7 September 2014.