The ruling confirmed that Section 423 of the Insolvency Act 1986 has extensive international reach, and does not require a transaction at an undervalue to leave the debtor with insufficient assets.
Background
The decision confirms that company voluntary arrangements remain a flexible tool for restructuring leasehold portfolios.
• No rigid test exists for “basic fairness” that requires a landlord to receive at least market rent, or that contractual rent should be interfered with to the minimum extent necessary.
• If a landlord is entitled to terminate the lease and receive a better outcome than in the alternative, any automatic unfairness from changes to the terms of the lease is negated.
• Whether a CVA is unfairly prejudicial depends on all the circumstances of the case.
Virgin Active Case - The Verdict
The High Court in London yesterday ruled in favour of Virgin Active's controversial restructuring plan. This is the second example of the court exercising its discretion to sanction a contested plan which sought to rely on the so called cross-class cram down; and the first to affect landlords.
The case, heard by Mr Justice Snowden (who has received praise for his balanced approach throughout the court process) sets the precedent for plans being used to bind landlords that vote against them.
We are hopefully now beginning to move out of the various lockdowns and restrictions that have been put in place to deal with the pandemic.
As things begin to return to some form of "normality", businesses might begin to feel some sort of relief. However, the inevitable consequence of normality returning is that some of the temporary rules that have been put in place to assist businesses through these difficulties will fall away.
R3, trade body for insolvency and restructuring accountants, said the first quarter of 2021 had seen a sharp fall in companies and individuals becoming bankrupt.
Corporate insolvencies in January to March fell by 31 per cent on the preceding quarter.
The figure was 63 per cent lower than the first quarter of 2020.
The impact of Covid-19 has been felt across the commercial property sector; nowhere more acutely, perhaps, than in "bricks and mortar" retail and hospitality.
Even pre-pandemic, the high street was being forced to adapt to the growth of eCommerce. But consecutive lockdowns have expedited the shift; for some, that change will be irreversible.
Landmark decision holds that the SFO does not have the power to procure documents from foreign companies outside the jurisdiction.
Der Bundesgerichtshof (BGH) hat mit Urteil vom 18. November 2020 (IV ZR 217/19) entschieden, dass Ansprüche gegen GmbH-Geschäftsführer auf Ersatz von Zahlungen, die nach Insolvenzreife vorgenommen wurden, vom Versicherungsschutz der D&O-Versicherung umfasst sind. Mehrere Oberlandesgerichte hatten dies zuletzt noch anders beurteilt. In der Praxis hatte dies zu einer erheblichen Unsicherheit geführt, nicht zuletzt mit Blick auf die infolge der COVID-19-Pandemie vorübergehend geänderten Insolvenzantragspflichten.
Hintergrund der Entscheidung
The last 12 months have seen frenetic changes in the field of insolvency law. Some of the changes in 2020 were already in the pipeline before we'd even heard of coronavirus but were accelerated by it, some were brought in purely in response to the pandemic and others had nothing to do with it at all.
CIGA
The majority of the changes to legislation apply UK wide and come from the most important piece of insolvency legislation that we've see in a generation - the Corporate Insolvency and Governance Act 2020 ("CIGA").
As always, there has been a lot going on in insolvency. We have highlighted below a few of the more important developments that we have seen in a very busy 2020 for insolvency lawyers.
Re Tokenhouse VB Ltd (Formerly VAT Bridge 7 Ltd) [2020] EWHC 3171 (Ch)