The High Court dismissed landlords’ challenges to the terms of New Look’s company voluntary arrangement (CVA) last week in a ruling that has sparked lively debate within both the landlord and restructuring sectors.
The landlords challenged the CVA by way of three main limbs:
It is unfortunately a common story for anyone who has been in business for any length of time: the unscrupulous director who, rather than confront creditors in an insolvency process, simply disappears as if by magic by dissolving the company and re-appearing elsewhere moments later, leaving creditors clasping nothing but smoke. This loophole has frustrated creditors for many years as it means their only remaining option is a commercially unattractive application to restore the company to the register in order to petition to place the company into compulsory liquidation.
Directors of companies have been facing, and continue to face, extremely challenging circumstances due to the financial impact of the coronavirus pandemic. The decisions they have taken through the pandemic to date have been made against a backdrop of unknowns: unknown closure durations, unknown projections and uncertain futures.
The Covid-19 pandemic has been with us now for over 12 months. At the time of writing, we are part way through the third national lockdown. The Government has indicated that schools should start reopening on 8 March 2021, but there is no indication of when non-essential retail will reopen or when the directive to work from home ‘where possible’ will be eased.
In measures that came into effect from 1 December 2020, the Finance Act 2020 dictates that for certain debts, HM Revenue & Customs (HMRC) will now rank much further up the chain of creditors when a company enters administration or liquidation. This is a radical change to a process that had previously ranked HMRC as an unsecured creditor for nearly 20 years.
What was the old system?
Throughout the current pandemic, there have been remedies available to commercial landlords in relation to unpaid rent arrears and other tenant breaches - though the introduction of the Corporate Insolvency and Governance Act 2020 had a significant impact on
With the news that the Arcadia Group has entered administration, suppliers of goods and services are left with a number of questions: what happens next, and can they still get paid? The answers to such issues have recently been drastically altered by the Corporate Insolvency and Governance Act (CIGA) 2020. Its impact is discussed in the eight key points considered below.
What would happen in ‘normal’ circumstances? A manageable problem
Following yesterday’s announcement that a number of the temporary measures brought in by the Corporate Insolvency and Governance Act (CIGA) to ease pressures on companies most at risk of insolvency during the ongoing Covid-19 crisis are to be extended, we look here at some of the key questions arising under CIGA in the context of the commercial landlord and tenant relationship.
The English Supreme Court has handed down its long-awaited judgment in Sevilleja v Marex Financial Ltd. The key issue the case has dealt with is the scope of the reflective loss principle in English law. This might not mean much to the average person, but the decision is potentially ground-breaking for creditors of companies seeking justice. This short article explains why.
The reflective loss principle
2020年の初めに新型コロナウイルス感染症（COVID-19）パンデミックが広がり始めてから、その拡散を抑えるために全米の州知事が事業の閉鎖を命じる行政命令を出しました。多くの事業主が、事業閉鎖期間の賃料の支払義務から逃れるための救済手段を探ろうとして賃貸借契約書、特にその不可抗力(force majeure)条項を調べました。事業体やその弁護士は、今まで経験したことのない性質のパンデミックと相次ぐ事業閉鎖を目の当たりにしていますが、そのような重要事項の指針となる判例はわずかしかありませんでした。しかし、イリノイ州J.B.プリツカー知事がCOVID-19危機の対応策として、レストランに対して同施設で食事をする客に料理を出す(on-premises consumption)ことを禁じる行政命令を出した結果1、 Hitz Restaurant Group事件において、イリノイ州北部地区連邦破産裁判所は、近時、賃貸借契約書に含まれる不可抗力条項に基づき、テナント（賃借人）‐債務者の賃料支払義務は一部免除されると判示しました。