The end of 2022 and the start of 2023 has seen a steady uptick in restructuring activity, not only for companies with complex capital structures but also small-to-medium sized enterprises seeking to take advantage of powerful restructuring tools (such as the UK’s Part 26A Restructuring Plan or Super Scheme).

The case of Goodbox Co Labs Limited (in administration) (Goodbox) is the first example of an individual creditor unilaterally seeking to access the Super Scheme.

1. State of the Restructuring Market

1.1 Market Trends and Changes

State of the Restructuring and Insolvency Market

There were 27,359 insolvencies in France as of the end of September 2021, down 25.1% from the same period in 2020, and down 47.9% from September 2019. Such reduction is relatively stable across all sectors, including those most severely affected by the health-related restrictions, such as accommodation and food services (down 44.2% year-on-year) and trade (down 28.1% year on year).

Fewer Insolvencies for More Opportunities

At the end of 2021, corporate bankruptcies (for most company sizes and in most sectors) were at their lowest level compared to the pre-COVID-19 figures from 2019, with a 50% drop in insolvency proceedings and a 10% decrease in pre-insolvency situations. This was largely due to the temporary impact of government emergency measures and support, including:

As we enter the final quarter of what has been a tumultuous year, the UK restructuring market has been open as usual for companies and creditors seeking to use the flexible restructuring implementation process of a Part 26 “scheme of arrangement” or the latest and greatest restructuring process now found in Part 26A of the Companies Act, a “restructuring plan” (or “Super Scheme” as we like to dub it).

Dead Horses

When is a dead horse really a dead horse? Given that ‘insolvency’ opens the door to various procedures for creditors and others, it should (in theory) be fairly easy to define. In practice, however, it is not.

What can the UK and South Africa learn from each other by comparing the business rescue regime with administration?

South Africa’s relatively recent business rescue regime (introduced in 2011) has exploded into a popular process for “affected persons” facing a company in financial distress. It shares some aspects with the administration procedure in England and Wales (UK). Lessons can be drawn from both the similarities and the differences between the two procedures that may benefit restructuring and insolvency practitioners both in the UK and South Africa.