The first half of 2020 saw a wave of company voluntary arrangements (CVAs) as companies explored their restructuring options against the backdrop of a darkening economic outlook.
Suppliers can no longer terminate contracts, refuse to supply goods or services or amend payment terms with an insolvent customer due to its insolvency, save in limited circumstances. The new rules - brought in by the Corporate Insolvency and Governance Act 2020 (“CIGA”) - governing protection of supplies significantly restrict parties’ autonomy in relation to customer insolvency and will be a cause of concern for many suppliers.
New protection of supplies to insolvent companies
In his judgment handed down on 7 May 2020 in the case of Gregory v ARG (Mansfield) Ltd [2020] EWHC 1133 (Ch), HH Judge Davis-White QC, sitting as a Judge of the High Court, commented (on an obiter basis) that where a company regulated by the Financial Conduct Authority (the “FCA”) seeks to enter administration, section 362A of the Financial Services and Markets Act 2000 (“FSMA 2000”) and paragraph 29 of Schedule B1 of the Insolvency Act 1986 (the “Insolvency Act”), require that writ
On 20 May 2020, the Corporate Insolvency & Governance Bill 2019-2021 was introduced to Parliament. With the Bill slated to be fast-tracked into law, here are some of the key insolvency aspects to be aware of.
Why now?
The extraordinary disruption to UK business caused by the COVID-19 lockdown has spawned much discussion about changes to existing insolvency laws to help businesses which are struggling to survive in this abnormal environment. One topic of discussion has been the so-called ‘light touch’ administration. Here we provide a quick overview of what this involves.
What do we mean by a ‘light touch’ administration?
It is now common knowledge that the Government has responded to the COVID-19 crisis with a number of protective measures, including the Coronavirus Job Retention Scheme (CJRS), which provides support to businesses that cannot maintain their current workforce because their operations have been severely affected by COVID-19. Under the CJRS, employers can apply for a grant to cover 80% of the wages (up to £2,500 per month) of employees who are placed on furlough leave.
In June 2019 the Government announced a plan to introduce a new “breathing space” scheme to protect individuals and families struggling with problem debt and to give those individuals and families extra help and time to get their finances under control.
Despite discussion in 2019 about corporate insolvency reforms and the reintroduction of the Crown Preference for certain tax debts, the Queens Speech on 19 December 2019 did not indicate any concrete plans to legislate for these areas this year. Airline insolvency, however, has made the list for 2020.
Why is airline insolvency a priority?
There are today at least 2,352 different types of cryptocurrencies being traded on various exchanges1. As legislators, regulators, financial institutions, and other businesses have been seeking to understand the opportunities and risk presented by cryptocurrencies, smart contracts, and other fast-moving Fintech developments since the launch of Bitcoin around 10 years ago, on 18 November 2019 the UK Jurisdiction Taskforce of the Lawtech Delivery Panel published a Legal Statement2 in relation to cryptoassets and smart contracts, following a period of public con
Following the judgments in recent years on attribution to a company of its directors' knowledge in Bilta (UK) Ltd (In Liquidation) v Nazir [2015] UKSC 23 and UBS AG (London Branch) and another v Kommunale Wasserwerke Leipzig [2017] EWCA Civ 1567, the UK Supreme Court has once more returned to this issue in Singularis Holdings Ltd (in Official Liquidation) (a Company Incorporated in The Cayman Islands) v Daiwa Capital Markets Europe Ltd [2019] UKSC 50, in a case where a bank (Daiwa) was held liable for breaching its Quincecare duty of care to its customer,