During the pandemic, the UK Government has put legislative measures in place to protect commercial tenants by preventing landlords from using certain remedies such as forfeiture and winding up petitions. However, the legislation does not specifically prevent a landlord from issuing debt claims against its tenants for arrears of rent and other amounts due under a lease (see the recent case of Commerz Real Investmentgesellschaft mbh v TFS Stores Limited [2021] EWHC 863 (Ch)).
This article summarises the findings of the High Court in Re gategroup Guarantee Limited [2021] EWHC 304 (Ch) (Re gategroup Guarantee Limited) and provides a view of its effects on the cross-border application of the Restructuring Plan (defined below) and the use of co-obligor structures in restructurings.
The Restructuring Plan
On 24 February 2021, the UK government laid The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 before Parliament.
These draft regulations introduce (among other items) new restrictions on “pre-pack” disposals to connected persons and are seemingly a policy response to growing criticism around the inequity of pre-pack sales.
Unless the Article 50 period is extended yet again, the UK is currently set to leave the EU on 31 October 2019 at 11pm GMT. However, if the Withdrawal Agreement is ratified, the impact of Brexit will, for most purposes, be postponed due to the transition period. This transition period is currently set to end on 31 December 2020. The Withdrawal Agreement provides that during transition, the UK would continue to be treated as if it were still an EU member for the purposes of a range of directly application EU legislation which is core to the smooth running of financial transactions.
This page was updated on 8 January 2021.
From 1 December 2020 new changes to the priority rules in insolvency will have a real impact on the recoveries achieved by secured creditors on the insolvency of a debtor. These new rules give HMRC priority above floating charge holders and ordinary unsecured creditors in relation to tax collected by an insolvent company from third parties, such as VAT, PAYE income tax and NICs.
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.
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