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Two directors from the UK were disqualified for 12 years each after they used funds from existing clients to payback previous clients. The directors' company entered into loan agreements with existing clients worth around £9.1 million for forex trades, in return for interest and loan repayments. The Insolvency Service later discovered that at least £8.4 million was used to make interest and loan repayments to previous clients.

Along with tightening social controls, the months ahead will be defined by various critical relationships and the rules that govern them. Of course they all interlock: material change in any of them impacts each of the others. Which causes multiple complexities in decision-making and risk assessment processes, both within a business and when looking at critical suppliers and customers:

Landlords and Tenants:

THE LANDLORD'S POSITION' TO CVAs v PRE-PACKS

There has been much press coverage in recent years on Tenant CVAs and the tempo on these has increased in recent weeks with the approval of CVAs for New Look, Pizza Express and Yo Sushi! amongst others.

The devastating effect of the global COVID-19 pandemic has been felt across the entire leisure and hospitality sector, but nowhere has felt the pain quite as acutely as the UK's night-time economy which, without extended Government support, may struggle to survive. With crowds the new enemy, many venues will remain closed for the foreseeable future and possibly for good.

The National Company Law Appellate Tribunal, Delhi (NCLAT) in the case of Sh. Sushil Ansal Vs Ashok Tripathi and Ors, has reiterated that a decree-holder though covered under the definition of creditor under Section 3(10) of the Insolvency and Bankruptcy Code (IBC) would not fall within the class of financial creditors and therefore, a decree holder cannot initiate a corporate insolvency resolution process (CIRP) against a corporate debtor with an object to execute a decree.

WELCOME TO OUR LATEST EDITION OF OUR TRUSTEE QUARTERLY UPDATE!

LEGISLATION

CORPORATE INSOLVENCY AND GOVERNANCE ACT RECEIVES ROYAL ASSENT 

The Corporate Insolvency and Governance Act 2020 received Royal Assent on 25 June 2020. As reported in our last Update, the Act brings in some major changes to the insolvency regime which are potentially relevant to scheme trustees seeking to enforce their rights against sponsoring employers, in particular:  

The ongoing pandemic will cause upheaval across all markets and sectors. Business models may become unviable. Sound businesses will suffer short-term liquidity crises. Customer behaviour may alter. Distress opportunities can create opportunity if buyers can work to an accelerated timeline.

1. IT'S NOT JUST INSOLVENCY

The COVID-19 pandemic has already led to business failures and forced others into negotiations with lenders, landlords and other stakeholders. For many sectors, the crisis has reinforced or accelerated the challenges that they were already facing. Government support measures including loans, furlough and temporary legislative changes have delayed some of the usual pressure points, but as support is eased, many businesses will have to find cash from significantly reduced turnover to satisfy deferred liabilities or repay loans.

In continuation of Reserve Bank of India’s (RBI) efforts to ease financial stress caused by the Covid-19 pandemic, the RBI issued the circular on the Resolution Framework for Covid-19 Related Stress dated 6 August 2020 (August 6 Circular). The August 6 Circular creates a limited time window for certain categories of borrowers affected by Covid-19 pandemic related business disruption to be allowed resolution plans in the nature of restructuring while permitting the borrower accounts to retain their status as ‘standard’.