Despite the ongoing global pandemic, opportunities for stressed and distressed investments have not been as prolific as many expected. The window for entry into credits opened and closed more quickly than imagined. Nevertheless there have been several high-profile restructurings using the English scheme of arrangement. Of course, some of these were already in motion prior to the onset of the pandemic. A handful of these have sought to test the recently enacted insolvency regime, whilst others have tested more established legislative principles.
THE CHALLENGE:
After years of selling services at a loss to grow its customer base, Agera Energy—a retail electricity and natural gas provider for commercial, industrial and residential customers in 16 states—realized its business was no longer viable. The company decided to file for chapter 11 bankruptcy protection after evaluating strategic alternatives.
The Corporate Insolvency and Governance Act 2020 (the Act) received royal assent on 25 June 2020 and is now in force.
The Corporate Insolvency and Governance Act 2020 (the Act) received royal assent on 25 June 2020 and is now in force, bringing with it significant changes to the insolvency world and the operation of the construction industry.
The current COVID-19 pandemic has placed many companies registered in England and Wales into a position where they are now either balance sheet or cash flow insolvency or both. The loss of these companies to the economy would be catastrophic and, as a result, the UK Government started the Bill’s passage through parliament on 3 June 2020.
The Corporate Insolvency and Governance Act 2020 completed ‘ping pong’ in the House of Commons on the afternoon of 25 June 2020, received Royal Assent at 18:08 the same night and took eff ect the following day, 26 June 2020.
At 254 pages, it covers a lot more than just statutory demands and winding-up petitions, including a new company moratorium procedure, but for property folk the immediate impact is that it eff ectively removes the statutory demand/winding-up route against defaulting tenants until at least 30 September.
The enacted Corporate Insolvency and Governance Act (the Act) introduces three permanent reforms to the existing insolvency legislation and certain temporary measures designed to address the immediate impact of COVID-19 on UK businesses. Among other things, the Act looks to maximise the potential for struggling companies to be maintained as a going concern. As market participants and the courts get to grips with the new legislation, it is clear that there will be some impact on the special situations landscape and the business of stressed and distressed investment.
The tragically unforeseen current novel coronavirus (COVID-19) global pandemic has brought unprecedented challenges to all aspects of Hong Kong society including the health of its citizens, the economy and the business community. Economic activities across most sectors globally are being devastated. The dire economic situation in Hong Kong has been exacerbated by the trade war between Washington and Beijing and the new national security law.
As the lockdown restrictions ease and employers slowly return to more normal ways of working, it is unfortunately inevitable that the impact of the coronavirus means some businesses will have to implement restructures and redundancies in order to survive.
This article looks at the key employment law provisions in restructuring/redundancy situations and offers practical guidance for managing these challenging processes.
Restructures and reorganisations
Background
Bresco Electrical Services Ltd (In Liquidation) -v- Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25