Executive Summary
Investors in LMA-based intercreditor agreements1 (ICA) should be reassured by the commercial approach recently taken by the High Court in construing the "Distressed Disposal" provisions (DD Provisions).
The increasing rates of insolvencies in Small and Medium Enterprises (SMEs) following the COVID-19 pandemic is continuing at a high rate, and England and Wales have seen the highest rates of insolvencies since 2009. Compared with the second quarter of 2022, the total of registered company insolvencies has increased by 13%. Compared with the first quarter of 2023, the rate of insolvencies has increased by 9%.
Five years after the collapse of construction company giant, Carillion PLC, its former Chief Financial Officer (CFO) Zafar Khan has been disqualified from acting as a company director, or being concerned in its management, for 11 years. This is just 4 years short of the maximum period of 15 years, reflecting the seriousness of the allegations against him. The Insolvency Service accepted an undertaking from Mr Khan in settlement of its action against him.
What makes a charge a fixed or floating security and why is this distinction important? The characteristics of a floating charge are long-established, but how does a lender ensure that valuable capital assets, i.e. investment properties, stocks, and bonds, of a borrowing company, are subject to valid fixed charge security?
Businesses are still struggling to recover post-Covid, with corporate insolvency figures continuing to rise. Recent research shows that the most common company insolvency procedure is creditors’ voluntary liquidation (CVL) and in March 2023, there was the highest monthly total of CVLs since January 2019.
The sectors that appear to have been hit the hardest are construction; wholesale and retail; accommodation and food services.
It is now two years since the 30 April 2021 introduction of the Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 (the "Regulations") and a good time to look back at whether the Regulations have achieved their purpose, what issues remain and what the next two years might look like.
Summary
The Government has finally issued its Policy Paper “High Stakes: gambling reform for the digital age”.
Nigel Huddleston, Minister for Sport, Tourism and Leisure launched the Government’s call for evidence in December 2020. It has taken over two years for the Government’s response to be published.
Key Points
With the cost-of-living crisis and a possible recession facing the UK economy, it is not surprising that government statistics show insolvencies are rising significantly, with a substantial increase on pre-pandemic levels, and up to 80% higher than the previous 12-month period.
An emerging trend within insolvencies is the recovery of crypto assets, whether the businesses are within the crypto sector, or whether it is any other entity holding value in cryptocurrencies.
Wilko Limited, known as ‘Wilko’, the well-known retailer specialising in home goods and gardening, is reportedly experiencing significant financial difficulties and is now relying on financial support to keep the business afloat.
Wilko has traded since 1930 as an independent family-run store and has expanded to over 400 stores. Despite this, Wilko has revealed it is experiencing financial difficulties when publishing its annual accounts to Companies House in November 2022.