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”).
At the recent R3 Scotland Forum[1], experts in the hospitality and leisure sector came together with the restructuring and insolvency profession to discuss the issues the sector is facing as the country emerges from lockdown. The panel discussion which was chaired by Judith Howson, Senior Manager at French Duncan and member of the R3 Scotland Committee was led by Steven Fyfe, head of the Scotland Hotels Divisions within Savills.
What is a pre-pack?
Pre-pack is the term used to describe an arrangement whereby the sale of all or part of a company’s business and/or assets is negotiated and agreed before an insolvency practitioner (IP) is appointed, with the relevant documentation being signed and implemented immediately or shortly after the appointment is made.
Following the demise of receiverships, administration is the insolvency process most commonly used to achieve a pre-pack sale.
Why are pre-packs used?
If you thought the popularity of CVA's had been overshadowed by restructuring plans you might have to think again and watch what happens in the coming months. As you will know from the press there are a number of high-profile retail CVA's which are being challenged by landlords – New Look and Regis to name just two.
The recent Accountant in Bankruptcy v Peter A Davies case examines how a family home is dealt with following sequestration of an individual. The sheriff's comments about the case suggest there could be room for improvement in the Bankruptcy (Scotland) Act 1985, to make the process clearer for everyone involved.
Case background
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?
The Alberta Court of Appeal recently released a decision in Bellatrix Exploration Ltd.’s (“Bellatrix”) proceedings under the Companies’ Creditors Arrangement Act (“CCAA”), in which the Court dismissed Bellatrix’s appeal of the lower court’s decision that certain agreements (the “Contract”) between Bellatrix and BP Canada Energy Group ULC (“BP”) constituted an eligible financial contract (“EFC”).
Last year, temporary changes to the bankruptcy process were brought in by the Scottish Government, to help individuals financially impacted by the pandemic. Scottish ministers have now introduced the Bankruptcy (Miscellaneous amendments) (Scotland) Regulations 2021, to make some of those changes permanent.
The main purpose of these measures is to improve access to minimal asset process bankruptcy ( "MAP" a form of bankruptcy typically aimed at people with low income and few assets) and to reduce the cost for debtors seeking bankruptcy more widely.
At the outset of the COVID-19 pandemic, provincial emergency orders required the majority of businesses to migrate their workforce to a work-from-home environment. As the pandemic has persisted, what was originally a short-term solution for many businesses, has led many of them to reconsider their current and future need for office space. For those businesses tied into long-term leases, many have turned to subleasing all or a portion of their space as a way to reduce their overhead.
On 26 March 2021, amendment to the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020 (the Regulations) will come into force.
The purpose of the Regulations is to extend some of the temporary measures introduced by The Corporate Insolvency & Governance Act 2020 (CIGA), to assist companies that are struggling to deal with the ongoing economic ramifications of pandemic-related restrictions.
These Regulations apply across the UK, including Scotland.