The first case to consider the requirement of a monitor to terminate a moratorium if they think a company is unable to pay certain debts was heard by the High Court on 4 February 2021. The case provides further clarity on the UK standalone moratorium process and is an example of a moratorium being used in order to restrain secured creditor action.
During the course of the pandemic we have seen an unprecedented level of government assistance aiming to aid businesses struggling with the effects of the pandemic. This has resulted in consistently low insolvency levels. This year we will see the lifting of certain of the restrictions and the end to some of the support initiatives that have been in place. We have outlined some of the key changes and what might be in store for 2022.
Overseas developments might have inspired mooted changes to create a debtor in possession model in Australia.
2021 began with a sense of optimism, but COVID-19 is continuing to wreak havoc on the Australian economy. The Commonwealth Bank of Australia is forecasting a 0.7% decline GDP in the September quarter and a likely rise in unemployment in July. New South Wales in particular, is expected to be hit very hard.
The latest decision in the Arrium collapse should give some encouragement to Australia's restructuring sector.
Following a lengthy trial of 38 days in the NSW Supreme Court in March and April 2021, Justice Michael Ball (no relation) has handed down the decision in the two proceedings, Anchorage Capital Masters Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025.
In dismissing these proceedings, Justice Ball has given some comfort to restructuring in Australia,
The UK Government has published a Consultation1 which sets out its proposals for targeted (but significant) amendments to certain aspects of the existing UK insolvency arrangements for insurers.
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
Companies post-restructuring are not subject to the rules protecting creditors of insolvent companies in section 588FL of the Corporations Act 2001.
There remain a number of issues in the proposed insolvency reforms that need careful deliberation, particularly where the Regulations have yet to be released for consideration.