The High Court has approved a £3bn rescue package for Thames Water to plug the leak in the water company's finances while it seeks to secure a wider restructuring deal. This is stage one in Thames Water's plan to restructure its £19bn debt mountain and secure £5bn in equity investment, with the initial cash injection urgently required to service £200m of debt which falls due on 24 March.

In a recent ruling (NMC Health PLC (in Administration) v Ernst & Young LLP [2024] EWHC 2905 (Comm)), the High Court declined to order disclosure of witness statements and transcripts of interviews conducted by administrators during their initial investigations, citing litigation privilege.

Litigation privilege

How to keep your head above water in the face of economic uncertainty, as told by Lucy Trott, Senior Associate, Stevens & Bolton.

Businesses in turmoil dominate the financial press. That depiction of financial distress is supported by monthly figures which make plain that the financial legacy of the Covid-19 pandemic is an increasing number of insolvencies. It is a trend which does not show any sign of abating.

2022年8月31日、ケイマン諸島のリストラクチャリング・オフィサー制度が施行されました[1]。この制度は、ケイマン諸島における支払不能状態会社の再建に関して、更に柔軟な再建方法を導入するものです。これは、リストラクチャリング請願の提出日から自動支払猶予期間が開始するというという特色もあります。

リストラクチャリング・オフィサー制度導入前において[2]、法定支払猶予の効果を有する再建方法は、ケイマン諸島における裁判所監督形式である再建手続において「ライトタッチ」（訳注：一時的な関与のみの想定）ベースの暫定清算人が選任される場合に限定されていました[3]。リストラクチャリング・オフィサー制度は、その手続面を見直し、さらにその利用に際して障害となるものを取り除いています。これには、(a)暫定清算人選任前に会社清算請願を提出しなければならない点（これは社会的信用を毀損する結果もたらします。）[4]、および、(b)暫定清算人が選任されるまでの間は支払猶予が認められない点[5]が含まれます。

2022年8月31日より前、ケイマン裁判所は、会社法（Companies Act）第104条(3)に基づく会社清算請願が提出された場合、以下の両要件を満たすときに、ライトタッチの暫定清算人を選任することができました。

What happens to a company at the end of an administration is a question that probably only keeps insolvency anoraks up at night.

There are a limited number of potential options, with the rescue of the company as a going concern being the number one objective to which all administrators aspire. However, more often than not, an administration will end with the company entering liquidation or, where the company has no property to permit a distribution to creditors, the dissolution of the company.

Boris Becker was originally made bankrupt in June 2017. In the ordinary course, a debtor is made bankrupt for a period of one year, and upon the anniversary of the bankruptcy order they are automatically discharged. While a bankrupt is undischarged, they are subject to various restrictions e.g. they are unable to act as company director or be involved in the management, promotion or formation of a business. Once discharged, the debtor can (in theory) start to rebuild their life afresh while their pre-bankruptcy assets remain in the hands of their trustee in bankruptcy (the Trustee).

In the recent case of Loveridge v Povey and Ors [2024] EWHC 329 (Ch) a company shareholder sought to challenge the administrators’ decision to rescue a balance sheet solvent company as a going concern by securing additional funding, as opposed to pursuing a sale of the business.

Background

Thames Water is making waves once again with renewed discussion around a potential special administration for the beleaguered water company. We wrote last year about reports that the government and Ofwat were making contingency plans for Thames Water after its failure to raise shareholder funding to bridge a funding gap with nearly £1.4bn of its borrowings due to mature this year.

We find ourselves in a year of transition, with (whisper it) the economy stabilising and an election tipped for the second half of 2024. Surely only a fool, in times such as these, would seek to anticipate what change could unfold in the legal landscape over the next 12 months. Challenge accepted! For 2024 we have dusted off our crystal ball and we set out below our (educated) guesses of what to expect for the year (or two) ahead…

Implementation of UNCITRAL model law on Enterprise Group Insolvency

The court has the power to challenge any decision of the officeholder in an insolvency process on application by a dissatisfied party. The ambit of that power depends upon the nature of the insolvency process but, broadly, the following categories of people will be entitled to apply: