The fact that more businesses have not failed is the most surprising thing about the Covid-19 pandemic. However, if you look at the fashion retail sector alone, the list of some of the high profile casualties is alarming: Arcadia Group, Bonmarché, Debenhams, DW Sports, Laura Ashley, M&Co, Monsoon, Moss Bros, Oasis and Warehouse, Peacock and Jaeger, TM Lewin and Victoria’s Secret (UK Business)… with more expected.
Every five years or so, the insolvency profession seems to try and wrestle with the public outcry about the use of so-called pre-packs. In its simplest terms, this is where “Widget Manufacturing Limited” goes into administration, and the very next day “Widget Manufacturing 2021 Limited” is operating the same business and being owned by the same shareholders. The only crucial difference is that several key liabilities (usually owed to landlords) are left behind in the insolvent business.
Key Takeaways
Key Takeaways
The UK Government announced on 24 September 2020 that some of the temporary Covid-19 measures introduced under the Corporate Insolvency and Governance Act (“the Act”) will be extended.
Summary of extension
Summary of extension
This article highlights where the legislation, as it was introduced in the Bill, differs from the final form of the Act
On 2 June 2020, Mr Justice Morgan handed down his judgment in the case of Re: A Company [2020] EWHC 1406 (Ch) in which a High Street retailer (whose identity is not disclosed) applied to restrain the presentation of a winding-up petition based on the provisions of the yet-to-be-enacted Corporate Insolvency and Governance Bill 2020 (the “Bill”).
The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, if approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime. The Bill includes a number of measures designed to protect businesses which are struggling as a result of the coronavirus pandemic. Some of these measures are temporary, however parliament may decide to extend these if necessary.
The key measures included in the Bill are summarised below.
Temporary provisions
The Government published its Corporate Insolvency and Governance Bill on 20 May 2020, which will implement the most significant reform to the UK’s insolvency framework in decades. In addition to permanent landmark changes, including introducing a business rescue moratorium and new restructuring plan, the Bill contains a number of temporary measures to help businesses respond to the COVID-19 crisis.