Following the substantial impact of the COVID-19 pandemic on global trade and business operations in the UAE, the Government of the UAE has taken measures to protect businesses facing financial difficulty. Among these measures has been a mechanism that provides relief to businesses in financial distress because of the pandemic within the framework of the UAE Federal Bankruptcy Law No. 9 of 2016 (the Bankruptcy Law).

On 28 June 2021, the UK High Court declined to sanction Hurricane Energy Plc’s restructuring plan. This was the first time a restructuring plan seeking to achieve a debt-for-equity swap against the wishes of existing shareholders had come before the court.

Background

These case summaries first appeared in LexisNexis’ Insolvency Case Alerter. They represent some of the more interesting insolvency decisions to have been published recently.

This summary covers:

1.Re PGH Investments Ltd [2021] EWHC 533 (Ch)

2.Re Mederco (Cardiff) Ltd [2021] EWHC 386 (Ch)

3.Lyle v Bedborough [2021] EWHC 220 (Ch)

4.Re TXU Ltd, Insolvency and Companies Court, 2 March 2021

5.Re Port Finance Investment Ltd [2021] EWHC 378 (Ch)

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID-19 pandemic were:

There has been much debate in recent years around the use made of certain UK restructuring tools – the company voluntary arrangement and, more recently, the new restructuring plan – to restructure commercial property leases. Commercial tenants argue that compromise is necessary to address high fixed costs that are no longer sustainable, but landlords have often been critical of the approach taken. This debate has become more acute in the context of the pandemic, as many High Street businesses subject to mandatory closure have built up significant rent arrears that need to be addressed.

The financial loss and the uncertainty caused by the pandemic continues to affect business globally, and an increase in corporate insolvency is widely anticipated. Arbitration is an effective dispute resolution mechanism, but a counterparty entering insolvency proceedings can be disruptive. We recently wrote about insolvency being one of the key trends in international arbitration in 2021.

A new bill, which the UK Government introduced to Parliament on 12 May 2021, seeks to extend the existing directors’ disqualification regime to the directors of dissolved companies.

Introduction

Restructuring & Insolvency analysis: The creditors of New Look Retailers Ltd (NLR) approved a company voluntary arrangement (CVA) that disproportionately impacted on a number of NLR’s landlords. The compromised landlords challenged the CVA on numerous grounds. In dismissing the application, Mr Justice Zacaroli held that the CVA was valid, notwithstanding that it sought to treat various creditors in different ways, and that challenges pursuant to section 6 of the Insolvency Act 1986 (IA 1986) failed.