With two of the UK's biggest cinema chains announcing, within days of each other, significant curbs to their operations due to COVID-19's continued impact on the entertainment sector, our restructuring and insolvency team have looked at the particular challenges faced by these venues and some of the steps their operators and funders should consider to help keep the curtains open.

THE IMPORTANCE OF THE UK'S ENTERTAINMENT INDUSTRY

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.

Included in this update: Government extends temporary COVID-19 measures in CIGA 2020 and more...

COVID-19

CIGA 2020 extensions in force

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.

Re Redstar Transport Pty Ltd (in liq) [2020] VSC 547

The joy of a summertime splash in the pool seems like a distant memory, at least for those of us in lockdown here in Melbourne.

Similarly elusive can be the granting of a pooling order under section 579E of the Corporations Act 2001 (Cth) for a corporate group in liquidation.

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.

Everlyte Ltd and Registrar of Personal Property Securities [2020] AATA 2584 (30 July 2020) K Parker, Member

PERSONAL PROPERTY SECURITIES REGISTER (PPSR) – Applicant registered security interest in collateral (helicopter) – helicopter stolen and sold to other party – other party on-sold helicopter to third party and applied to register financing change statement to end applicant’s interest – meaning of “security interest” – decision affirmed

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:  

Ford (Administrator), in the matter of The PAS Group Ltd (Administrators Appointed) v Scentre Management Ltd [2020] FCA 1023

Factual background