National Car Parks' proposed restructuring plan aimed to write-off arrears, cut rents and close unwanted sites but why did the plan stall?

On 30 April 2021, National Car Parks launched its proposed restructuring plan, which is the flagship new restructuring process introduced last June through the Corporate Insolvency and Governance Act 2020. Around a dozen restructuring plans have come to market so far, but the NCP plan was only the second (the first being Virgin Active) to involve landlord creditors.

Suppliers and subcontractors in the construction industry should be mindful of a recent unreported decision of the Ontario Superior Court of Justice. In Carillion Canada Inc. (Re), the Court held that an automatic cash sweep of Carillion’s Ontario bank account rid the funds of their trust character leaving Carillion’s subcontractors in Canada with no proprietary claim to $22 million sitting in an overseas bank account maintained with a global bank (the “Bank”).

随着香港及内地就相互认可和协助破产程序及重组事务达成共识，一个新纪元到来了。从今往后，希望通过中国债务人位于香港的财产收回欠款的债权人，或是拥有内地财产的香港运营实体的债权人，终于在谈判桌前享有了话语权。

随着香港及内地就相互认可和协助破产程序及重组事务达成共识，一个新纪元到来了。从今往后，希望通过中国债务人位于香港的财产收回欠款的债权人，或是拥有内地财产的香港运营实体的债权人，终于在谈判桌前享有了话语权。

霍金路伟最新一期《投资中国：法律监管信息速递》专题系列将为您深度探秘下列安排：

Sir Alastair Norris’ High Court judgment of 14 May 2021, confirming the sanctioning of the scheme of arrangement of DTEK Finance PLC in respect of existing bank lenders (the “Bank Scheme”) and the scheme of arrangement of DTEK Energy B.V. in respect of the outstanding notes (the “Note Scheme”) has now been published.

The restrictions on filing statutory demands and winding up petitions has been extended (again) until the end of September 2021. At the same time, the moratorium on landlords evicting commercial tenants has been extended to March 2022. Both are longer than expected. Perhaps more interestingly, the announcement includes reference to the imposition of an arbitration mechanic for arrears – a step from the Government that will provide another route to impose a compromise on arrears.

In the latest High Court decision relating to Company Voluntary Arrangements in the UK, the judge held that the Regis hairdressing group CVA should be revoked on the basis that it favoured shareholders at the expense of landlord creditors

On 12 May 2021, Mr Justice Snowden sanctioned Virgin Active’s three inter-conditional restructuring plans under Part 26A of the Companies Act 2006. The case has been followed with significant interest in the restructuring community because the restructuring plans included the most extensive cross-class cram down proposal since the introduction of the restructuring plan process last year (DeepOcean and Smile Telecoms are the only other restructuring plans to utilise the cram-down mechanism).

The government has introduced the Debt Respite Scheme (Breathing Space), which came into effect on 4 May 2021, which allows individuals who are struggling with debt to apply for a “breathing space” in which to sort out their finances.  This scheme, which was introduced in response to the unprecedented impact of the COVID-19 pandemic, includes residential tenants who are in arrears of rent.

What is a breathing space?

There are two types of breathing space:-

Hong Kong and the Mainland have agreed a new co-operation mechanism for cross-border insolvency. Under the agreement, liquidators from Hong Kong may apply to Mainland courts for recognition of insolvency proceedings in Hong Kong, whilst bankruptcy administrators from the Mainland can apply to the Hong Kong High Court for recognition of bankruptcy proceedings in the Mainland.

Hong Kong and the Mainland have agreed a new co-operation mechanism for cross-border insolvency.

Reverse vesting orders (or “RVOs”) allow the realization of value from assets of a debtor company in circumstances where a traditional transaction model is not effective, preserving the value of permits, tax losses and other assets which cannot be transferred to a purchaser. Two recent decisions demonstrate the willingness of courts to embrace creative solutions, where appropriate, to realize value for stakeholders.

What is a Reverse Vesting Order?