In the latest High Court decision relating to Company Voluntary Arrangements in the UK, the judge held that the Regis hairdressing group CVA should be revoked on the basis that it favoured shareholders at the expense of landlord creditors

In Dr. Thomas Markusic et al. v. Michael Blum et al. memorandum opinion 200818, the Delaware Chancery Court (the “Court”) declined to extend the Gentile doctrine. In so doing, the Court held that the counterclaims attempting to rely on it had to be dismissed.

Today (19 September), following an expedited trial, the High Court rejected the application brought by affected landlords to challenge the CVA entered into by Debenhams Retail Limited.

The landlord applicants sought to challenge the CVA which closed stores and imposed rent reductions on landlords according to different categories. 'Category 5' landlords took the biggest hit with rents halved and early termination dates imposed. The CVA proposal was approved by Debenhams' creditors on 9 May 2019.

Five grounds were advanced by the landlords during the hearing:

In Longoria v. Somers and LC Therapeutics, Inc., C.A. No. 2018-0190-JTL (Del. Ch. May 28, 2019), the Delaware Court of Chancery examined its authority to tax the costs of receivership against the stockholder of an insolvent corporation. The Court’s decision highlights an exception to the general principle that stockholders of a properly maintained corporation are not responsible for costs incurred by the corporation and illustrates a scenario where stockholders may be held liable for a corporation’s obligations.

On a motion to “’confirm the trial schedule,’” Vice Chancellor Glasscock determined that actions brought by the limited partners of a partnership based upon the general partner’s alleged fraud, self interest and breach of the partnership agreement were direct claims and therefore not subject to a stay pursuant to the partnership’s bankruptcy proceeding. Sehoy Energy LP et al. v. Haven Real Estate Group, LLC et al., C.A. No. 12387-VCG (Del. Ch.

The last two months have seen two key appeals in which the court was required to decide whether the tenant of a particular type of building should enjoy the statutory right to acquire the freehold of a house. This right is enshrined in the Leasehold Reform Act 1967.

The properties, and the questions for the court in each case, were quite different. What the judgments had in common was a purposive approach to interpretation of the Act.

It has been understood since the Hindcastle case in 1997 that a guarantor’s payment obligations under a lease survive disclaimer by an insolvent tenant’s liquidator.  What has been less clear is how that works, given that the tenant’s obligation to pay rent dies when the lease is disclaimed.

The High Court of England and Wales handed down judgment last week in the case of Christine Mary Laverty and others as Joint Liquidators of PGL Realisations PLC and others v British Gas Trading Limited [2014] EWHC 2721.  In an important decision for the insolvency industry, it was held that the statutory deemed contracts regime for gas and electricity supply could not be used by utilities companies to gain priority over other creditors.

A High Court ruling in England today has provided a significant clarification of the law relating to payment of rent as an administration expense.

In Leisure (Norwich) II Limited v Luminar Lava Ignite Limited (in administration), the Court confirmed that rent payable in advance prior to the appointment of administrators is not payable as an expense of the administration, even if the administrators continue to use the property. This means that the rent would not be given priority over other unsecured debts.