As we enter a new era of ‘living with Covid’, new financial woes accompany new freedoms for many. Inflation is now at a 30-year high, with income failing to keep pace with the cost of living and interest rates rising twice in the last 4 months. A number of retailers, including Next, B&M and Greggs, have warned that soaring costs cannot be fully absorbed and will lead to price rises for consumers in 2022.

So, what is going on for retailers post-pandemic? And what steps can smaller, boutique brands take to mitigate the risks to their businesses going forward?

The Insolvency Service published its latest company insolvency statistics at the end of January, reporting both on Q4 2021 as well as 2021 as a whole.

The statistics can be accessed here and we highlight some of the key takeaways below.

1. Q4 2021 Company insolvency statistics

In brief

The courts were busy in the second half of 2021 with developments in the space where insolvency law and environmental law overlap.

In Victoria, the Court of Appeal has affirmed the potential for a liquidator to be personally liable, and for there to be a prospective ground to block the disclaimer of contaminated land, where the liquidator has the benefit of a third-party indemnity for environmental exposures.¹

Throughout the pandemic, a steady stream of government support was made available to prop-up businesses. As we move towards a New Normal, those support packages are being scaled-back. Many businesses are still recovering from the shock of the last 18 months and, with high levels of historic debt as an additional burden, are not yet back to full financial health.

Creditors of English Defence League founder Tommy Robinson (real name Stephen Yaxley-Lennon) have appointed a licensed insolvency practitioner to act as his Trustee in Bankruptcy to investigate any claims against him and seek to recover any hidden assets.

Robinson applied for bankruptcy shortly after his divorce in February 2021, and while libel proceedings were ongoing against him. A bankruptcy order was made on 3 March 2021. In July 2021, Robinson was ordered to pay £100,000 in damages, together with legal costs, on top of his bankruptcy debts, which are estimated at £2m.

Administrators of Arena Television are reportedly investigating an alleged fraud involving millions of pandemic loans, where government-backed loans were offered to businesses to help them deal with the pandemic, and are suing two of the directors for breach of fiduciary duty. More companies may be in a similar position as, according to the National Audit Office, it is likely that the level of fraud in the bounce back loan scheme ranges from £3.5bn to £4.9bn. Who can claim these ill-gotten gains?

Directors’ duties

Following the recent surge in wholesale energy prices, we are seeing increasing numbers of energy supplier insolvency in the news and customers are finding themselves transferred to new providers.

In brief

Australia's borders may be closed, but from the start of the pandemic, Australian courts have continued to grapple with insolvency issues from beyond our shores. Recent cases have expanded the recognition of international insolvency processes in Australia, whilst also highlighting that Australia's own insolvency regimes have application internationally.

Key takeaways

In brief

With the courts about to consider a significant and long standing controversy in the law of unfair preferences, suppliers to financially distressed companies, and liquidators, should be aware that there have been recent significant shifts in the law about getting paid in hard times.

In this session, the panellists took up the challenge of predicting the post COVID future for directors, and the immediate challenges they will face as a result of the winding back of protections and support provided in 2020.