Summary

The new National Security and Investment Bill, which aims to provide the Government with the necessary powers to scrutinise and intervene in business transactions to protect national security, will introduce a mandatory notification regime across 17 sectors in the UK economy. Although the Bill provides a carve-out for rights exercisable by administrators, insolvency practitioners will still need to be mindful of the risks that the Bill may have on distressed M&A transactions, which may be rendered void if captured by the regime and the notification requirements not complied with.

This past May, in a highly-anticipated decision, the Supreme Court held in Mission Product Holdings, Inc. v. Tempnology, LLC that a debtor’s rejection of an executory contract under Section 365 of the Bankruptcy Code has the same effect as a breach of contract outside of bankruptcy.