Last week was a bad week for landlords, with challenges to the restructuring plan proposed by the Virgin Active Group and the company voluntary arrangement ("CVA") implemented by New Look both being unsuccessful in the courts. Whilst the recent revocation by the court of the Regis CVA may provide a glimmer of hope, the general outlook is not optimistic.
Business headlines have warned of a potential “chilling effect on buyouts” as a result of the decision recently issued by the U.S. District Court for the Southern District of New York in In re: Nine West LBO Securities Litigation (Dec. 4, 2020). Contrary to the views of some other commentators on the decision, we do not believe that the decision is likely to chill leveraged buyout activity, to upend how LBOs have been conducted, or to significantly increase the potential of liability for target company directors selling the company in an LBO.
*Fried Frank published a memorandum titled COVID-19 Pandemic: Key UK Government and Bank of England Initiatives to Support Businesses on March 30, 2020 and published updates to this memorandum on April 15, 2020, May 13, 2020 and June 15, 2020. As we approach the expiry of a number of the UK Government's initial COVID-19 business support initiatives, this memorandum summarises the UK Government measures that have been announced and that are to be available to eligible UK businesses as we move into 2021.
In the second part of our coverage of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the Act), we consider amendments made to certain insolvency provisions of the Companies Act 2014 (the 2014 Act). All of these measures apply for an "interim period", expiring on 31 December 2020 (unless extended by Government).
Dividends
On 21 July 2020 the Irish High Court approved a scheme of arrangement for the world's largest regional aircraft lessor Nordic Aviation Capital DAC (Nordic).
The scheme, which included a 12-month standstill and deferral of c. US$5 billion of secured and unsecured debt, was a market-first for the aircraft leasing industry and has been watched closely by others in the sector.
The Irish scheme had a number of innovative features:
On 21 July 2020, the Irish High Court approved a scheme of arrangement for the world’s largest regional aircraft lessor Nordic Aviation Capital DAC (NAC).
The scheme, which included a 12-month standstill and deferral of c. US$5bn of secured and unsecured debt, is a market-first for the aircraft leasing industry in Ireland whose customer base has been seriously impacted by COVID-19. We look at the NAC scheme of arrangement and consider whether it is a viable restructuring option for the aviation sector more generally.
The Department of Business, Enterprise and Innovation has published the general scheme of proposed legislation amending the Companies Act 2014.
1. Summary
The Supreme Court decision in Bresco Electrical Services Ltd (In Liquidation) v- Michael J Lonsdale Electrical Ltd handed down on 17 June 2020 is both timely and significant given the "new normal" that we are all now operating within. In the current economic climate of "lockdown" and the present economic downturn that is now occurring, the worlds of construction and insolvency are now likely to interact and collide on a more frequent basis.
What new measures have been introduced by the UK government to provide further support to commercial tenants struggling to pay rent?
On 20 May 2020, the UK Government presented the Corporate Insolvency and Governance Bill (the “Bill”) to the House of Commons. The Bill is being fast-tracked through Parliament, with the aim of completing all stages and becoming law during July 2020. On 3 June 2020, the Bill was passed by the House of Commons and the Bill is now to be considered by the House of Lords, and if approved, it will require Royal Assent before becoming law.