In keeping with the general theme of this 'new year', the insolvency division of the English High Court started 2021 in much the same way as it finished off 2020.

It followed up its landmark judgment in Re Tokenhouse VB Limited [2020] EWHC 3171 (Ch) (Tokenhouse) with a decision in the case of Re NMUL Realisations Limited [2021] EWHC 94 (Ch) (NMUL), in ruling that failure to comply with procedural notice provisions did not invalidate the appointment of the administrators.

Avoiding a Cliff-edge of Insolvencies? Observations ferom the recent House Of Lords debate on extension of creditior restrictions

COVID PROTECTIONS EXTENDED TO GIVE BUSINESSES A LAST CHANCE TO PLAN RECOVERY. TIME TO CONSIDER A COVID-19 CVA?

If the announcements last week on the lack of downward tier revisions for many areas is the bad news, the silver lining for the struggling and affected businesses came in the reinstatement of the temporary suspension on the use of statutory demands and winding up petitions until 31 March 2021.

Company Voluntary Arrangements (CVAs) are an insolvency procedure established under the Insolvency Act 1986 which allow a struggling company to reach a compromise on debts due with a sufficient majority of creditors, thereby avoiding a formal insolvency. They have primarily been used only by large high street retailers and are not often considered, particularly in Scotland, a realistic option for small and medium companies (SMEs).

In the face of the COVID-19 pandemic and with a new model available, we believe it is time for a rethink.

With two of the UK's biggest cinema chains announcing, within days of each other, significant curbs to their operations due to COVID-19's continued impact on the entertainment sector, our restructuring and insolvency team have looked at the particular challenges faced by these venues and some of the steps their operators and funders should consider to help keep the curtains open.

THE IMPORTANCE OF THE UK'S ENTERTAINMENT INDUSTRY

This week’s TGIF takes a look at the recent case of Mills Oakley (a partnership) v Asset HQ Australia Pty Ltd [2019] VSC 98, where the Supreme Court of Victoria found the statutory presumption of insolvency did not arise as there had not been effective service of a statutory demand due to a typographical error in the postal address.

What happened?

This week’s TGIF examines a decision of the Victorian Supreme Court which found that several proofs had been wrongly admitted or rejected, and had correct decisions been made, the company would not have been put into liquidation.

BACKGROUND

This week’s TGIF considers Re Broens Pty Limited (in liq) [2018] NSWSC 1747, in which a liquidator was held to be justified in making distributions to creditors in spite of several claims by employees for long service leave entitlements.

What happened?

On 19 December 2016, voluntary administrators were appointed to Broens Pty Limited (the Company). The Company supplied machinery & services to manufacturers in aerospace, rail, defence and mining industries.

This week’s TGIF considers the recent case of Vanguard v Modena [2018] FCA 1461, where the Court ordered a non-party director to pay indemnity costs due to his conduct in opposing winding-up proceedings against his company.

Background

Vanguard served a statutory demand on Modena on 27 September 2017 seeking payment of outstanding “commitment fees” totalling $138,000 which Modena was obliged, but had failed, to repay.

The recent decision of the Court of Appeal of Western Australia, Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in Liquidation) (Receivers and Managers Appointed) [2018] WASCA 163 provides much needed clarity around the law of set-off. The decision will no doubt help creditors sleep well at night, knowing that when contracting with counterparties that later become insolvent they will not lose their set-off rights for a lack of mutuality where the counterparty has granted security over its assets.