Two years on: review of CIGA permanent measures

The restructuring plan has so far proven to be a powerful tool to facilitate restructurings of complex capital structures. Two recent cases provide further helpful guidance for advisers when formulating a restructuring plan and for investors who may be affected by its terms.

Amicus Finance plc (in administration) ("Amicus")

As previously reported in our article of 21 May 2020, the Corporate Insolvency and Governance Act 2020 (Act), introduced a number of new tools for businesses suffering financial distress. One of the new measures introduced by the Act was the 'Restructuring Plan' – a process modelled on the existing scheme of arrangement (Scheme) but with the following key distinctions:

On 26 June 2020, the Corporate Insolvency and Governance Act 2020 (the "CIGA") came into effect. As anticipated in our previous article the CIGA was fast-tracked through Parliament and some amendments were ultimately made prior to it becoming law.

The decision of Mr Justice Morgan in A Company (Injunction To Restrain Presentation of Petition) [2020] EWHC 1406 (Ch) (judgment anonymised) which was handed down on 2 June 2020 will be of interest to tenants and landlords alike in the current climate. The judgment, which follows the decision in Travelodge Ltd v Prime Aesthetics Ltd [2020] EWHC 1217 (Ch) will be of huge precedent value to commercial tenants that have been impacted by coronavirus and have been unable to meet their rent obligations as a result.

Following the Government's announcement in March that the hotly anticipated changes to the UK's insolvency regime would be rushed through Parliament with further, temporary, provisions to mitigate the impact of COVID-19, insolvency practitioners and business professionals alike have been awaiting further clarity on what the Business Secretary's comments mean for businesses both in the current climate and more generally.

In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.