Background of the Act

Pandemic related restrictions on winding up companies come to an end.

As part of the overall scaling down of the COVID-19 support provided to UK businesses, the UK government has announced changes to the regime for winding-up petitions, with effect from 1 October – withdrawing, at least in part, some of the protections currently afforded to businesses.

Current position

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID-19 pandemic were:

In Shameeka Ien v. TransCare Corp., et al. (In re TransCareCorp.), Case No. 16-10407, Adv. P. No. 16-01033 (Bankr. S.D.N.Y. May 7, 2020) [D.I. 157], the Bankruptcy Court for the Southern District of New York recently refused to dismiss WARN Act claims against Patriarch Partners, LLC, private equity firm (“PE Firm“), and its owner, Lynn Tilton (“PE Owner“), resulting from the staggered chapter 7 bankruptcies of several portfolio companies, TransCare Corporation and its affiliates (collectively, the “Debtors“).

Joining three other bankruptcy courts, Judge Thuma of the District of New Mexico recently held that the rules issued by the Small Business Administration (“SBA“) that restrict bankrupt entities from participating in the Paycheck Protection Program (“PPP“) violated the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748, P.L. 115-136 (the “CARES Act”), as well as section 525(a) of the Bankruptcy Code.

The Southern District of New York recently reminded us in In re Firestar Diamond, Inc., et al., Case No. 18-10509 (Bankr. S.D.N.Y. April 22, 2019) (SHL) [Dkt. No. 1482] that equitable principles in bankruptcy often do not match those outside of bankruptcy. Indeed, bankruptcy decisions often place emphasis on equality of treatment amongst all creditors and are less concerned with inequities to individual creditors.

Introduction

In Wells Fargo Bank, N.A., f/b/o Jerome Guyant, IRA v. Highland Construction Management Services, L.P. et al., Nos. 18-2450-52 (4th Cir. March 17, 2020), the Fourth Circuit Court of Appeals recently upheld that a borrower’s indirect economic interests in a limited liability company (LLC) were not assigned to a lender under a conveyance in a security agreement assigning mere membership interests, pursuant to Virginia state law.

Facts