For most businesses, the Chancellor’s budget statement yesterday brings some welcome news with the extension of certain critical Covid-19 support measures. However, this is coupled with the removal of certain government-backed loan schemes and a future increase in the corporation tax rate from 19 per cent to 25 per cent from 2023 onwards.
Following a quick procedure, the Netherlands has seen its first ever court-approved private restructuring plan permitted under the WHOA (Wet homologatie onderhands akkoord), introduced on 1 January 2021.
Over the last 12 months, global markets have been amazingly resilient, indeed even buoyant, aided in large part by governments around Europe and the world providing seemingly unlimited funding and extensive financial stabilisation measures, such as quantitative easing.
This, coupled with protective legislation for companies to prevent insolvency filings and to ensure continued trading – for example, moratoriums, relaxations on insolvency filing obligations and restrictions on creditor actions – has given businesses significant breathing space and prevented widespread failures.
In 2020, several significant judicial decisions were rendered across Canada relevant to commercial lenders, businesses and restructuring professionals. This bulletin summarizes the core issues of importance in each case and provides status updates on the cases reported on in our January 2020 bulletin, Key Developments in Canadian Insolvency Case Law in 2019.
The Pension Schemes Act 2021 (‘the Act’) has received Royal Assent, with the UK government indicating that key provisions will come into force by autumn 2021.
The Act includes a number of provisions that will significantly impact restructuring activity involving financially distressed groups with a UK defined-benefit (DB) pension scheme.
What will change under the Act?
Below are some of the most significant changes being introduced by the Act.
In any economic downturn, there is usually an increase in the number of demands made throughout supply chains and in particular by owners / employers on project securities (e.g. for performance issues, upon termination or following insolvency) and the recent global economic slowdown caused by the coronavirus pandemic is no different.
The UK's latest quarterly company insolvency statistics, including the 2020 annual summary, were published on 29 January, painting a picture of the effectiveness of government measures introduced over the past year to support companies during the COVID-19 pandemic.
After Virgin Atlantic and Pizza Express achieved ‘too much consent’ and did not need cross-class cram down in the end, DeepOcean is the first judgment applying cross-class cram down as part of a restructuring plan.
In Uralkali v Rowley and another [2020] EWHC 3442 (Ch), the High Court confirmed that it is unlikely that an officeholder would be found to owe a duty of care to participants in a sale process out of an insolvent estate. This is an important decision which will give officeholder’s considerable comfort that operating an administration or liquidation sale in the ordinary course is unlikely to expose them to risk of liability to a bidder for the way the process is run.
The Act providing for court confirmation of a private restructuring plan (Wet homologatie onderhands akkoord (WHOA)) entered into force on 1 January 2021. It introduces a fast and efficient pre-insolvency procedure to restructure a company’s business through a scheme between the company and its creditors and/or shareholders, with the possibility of a court-approved cross-class cram down.