In a significant further application of the Court of Appeal’s reasoning in Adler, Thames Water and Petrofac, the High Court declined to sanction a cross-class cram down restructuring plan proposed by Waldorf Production UK Plc.
High rates of insolvencies look set to continue as the latest quarterly insolvency statistics have been published for England and Wales. Whilst the statistics show a 2% dip from the second quarter of 2023, the number of insolvencies remains 10% higher than in 2022 and shows a return to pre-pandemic levels for compulsory liquidations and administrations. It is particularly striking that the first two quarters of 2023 represent the highest quarterly insolvencies since Q2 2009.
The Government’s roadmap out of lockdown signals a return to trading for a number of businesses hard-hit by the COVID-19 pandemic. There is however potential for heightened financial distress in the coming period as existing support measures are withdrawn and currently deferred liabilities become payable, bringing the challenges faced by this sector into sharp focus.
The onset of COVID-19 has precipitated and accelerated substantial change for businesses in fashion retail, adding to particular headwinds already facing the sector in the UK. While many brick-and-mortar fashion retailers were already experiencing challenging trading conditions at the start of 2020 – ranging from rent and rates overheads to increased online competition – restrictions on and changes to consumer preferences resulting from the pandemic have intensified the challenges facing many fashion retailers and businesses operating in the supply chain.
A recent decision of the Federal Court has confirmed that a secured creditor who consents to employee creditors being paid out of the charged asset pool is entitled to be subrogated to the priority rights of those employee creditors.
1.1 Facts
Australia and New Zealand Banking Group Limited (ANZ) was the only secured creditor of Akron Roads Pty Ltd (Akron), holding fixed and floating charges over all of Akron’s undertakings and assets. In 2010, liquidators were appointed to Akron.
Insolvency relief extended to 31 December 2020
On Sunday, the Federal Government announced that it will extend until the end of the year insolvency relief measures which were put in place from March 2020 as part of its response to the COVID-19 pandemic which were due to expire on 25 September 2020.[1]
As part of its economic response to the COVID-19 pandemic, yesterday the Government passed a ‘temporary safe harbour’ insolvency measure[1].
The dialogue is changing yet is the law enabling the practical change Directors need?
Achieving significant cultural shift in any business environment is no easy task, so it’s by no means ground-breaking to declare that after 1 year in operation, it still cannot be said that the new “Safe Harbour” legislation has resulted in a cultural change among directors.
It was first published by the Governance Institute of Australia.
In the event of a contractual counterparty going into liquidation, whether or not a trade counterparty may claim set-off against debts owed to the insolvent counterparty can dramatically affect the commercial position of the account debtor. This was recently highlighted in the decision of Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (In Liquidation) (Receivers and Managers appointed) [2017] WASC (2 June 2017).
What does this mean for you?