On 13 January 2020, the High Court sanctioned the restructuring plans proposed by three UK companies in the DeepOcean group, under Part 26A of the Companies Act 2006.

The United Kingdom formally left the European Union (EU) at 11pm on the 31 January 2020 (Exit Day) and entered into a period of transition. This transition period largely maintained the “status quo” with regards to restructuring and insolvency law and practice, primarily due to the UK having secured ratification of the withdrawal agreement. This made the arrangements between the UK and the EU fully reciprocal post-Exit Day and avoided the no-deal “cliff edge” Brexit, which many had initially feared.

In brief

The new small business insolvency reforms enacted by the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Cth) (Corporations Amendment Act) - which inserts a new Part 5.3B into the Corporations Act 2001 (Cth) (Corporations Act) - are due to come into effect on 1 January 2021.

In brief

The new small business insolvency reforms enacted by the Corporations Amendment (Corporate Insolvency Reforms) Act 2020 (Corporations Amendment Act) - which inserts a new Part 5.3B into the Corporations Act 2001 (Cth) (Corporations Act) - are due to come into effect on 1 January 2021.

After a year in which numerous businesses have relied on various forms of government support to stay afloat, many will be hoping that 2021 offers the chance to emerge from this period and resume some degree of normal trading. Certainly, the coming year will be make-or-break time for those businesses that have been most impacted by the pandemic – and as government assistance is wound back, the demand for working capital funding is likely to be high.

In brief

The Federal Court has ordered that an insolvency professional be appointed to act as a referee and to decide questions of insolvency in relation to a series of alleged unfair preferences, rather than have the judge undertake that task.

Contents

With over a third of hospitality businesses currently at moderate to severe risk of insolvency (according to the most recent ONS survey), many in the sector are urgently considering the best way forward. One strategy, which we have recently seen a number of casual dining businesses like Carluccios and Gourmet Burger Kitchen deploy, is a ‘prepack’ administration. However, although the deals involving household names may grab the headlines, pre-packs are also widely used by small and micro businesses.

On 30 October 2020, the Insolvency Service published its quarterly insolvency statistics for July to September 2020 (Q3 20).

What do the stats say?

In brief

On 8 October the Insolvency Service published a report on pre-pack sales in administrations, together with draft regulations imposing a mandatory referral to independent scrutiny in the case of pre-packaged sales to connected parties.

This article, written by Tim Carter and Helen Martin, considers the background to the proposed regulations, their content and their potential impact.

Background