In previous blogs, we’ve discussed the temporary changes to the law being brought about by the UK Government’s Corporate Insolvency and Governance Bill. The Bill is set to strip Landlords of some of the tools available to recover arrears from their tenants. It will render statutory demands served between 1 March to 30 June 2020 ineffective, while making it near impossible for landlords to liquidate tenants (by winding them up) if they have been financially affected by COVID-19.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently held managing members of a limited liability company that filed a Chapter 11 bankruptcy were equitably estopped from asserting ownership of equipment where the members previously verified documents in the bankruptcy showing ownership of the equipment by the company.

A copy of the opinion in Richards v. Rabo ArgiFinance, LLC is available at: Link to Opinion.

The U.S. Court of Appeals for the Seventh Circuit recently held that absent unforeseen extraordinary circumstances, debtors in Chapter 13 cases cannot proceed on appeal in forma pauperis.

A copy of the opinion in Bastanipour v. Wells Fargo Bank, N.A. is available at: Link to Opinion.

The Corporate Insolvency and Governance Bill (“Bill”) was published on 20 May 2020. The overarching objective of the Bill is to provide businesses with the flexibility and breathing space they need to continue trading during this difficult time. The measures introduced by the Bill are designed to help UK companies and other similar entities by easing the burden on businesses and helping them avoid insolvency during this period of economic uncertainty.

The Corporate Insolvency and Governance Bill was finally introduced to Parliament on 20 May. It is now clear that the provisions of the Bill relating to statutory demands and winding up petitions will apply to Scotland without the need for the Scottish Government to pass further legislation.

Statutory demands

In our recent update on AGMs, we mentioned that the Government is due to pass legislation giving companies increased flexibility for holding Annual General Meetings, amongst other measures to help businesses through the COVID-19 situation.

The interaction between the principles of insolvency law and the Coronavirus Job Retention Scheme (JRS) have come into sharp focus in recent weeks, with the administrators of Carluccio's and Debenhams seeking guidance from the English courts about how the scheme impacts on their obligations to employees.

The Corporate Insolvency and Governance Bill (the “Bill”) has been laid before the UK Parliament today, Wednesday 20 May 2020.

The Bill, if passed, will implement some significant changes to UK insolvency law and at the same time effect a range of temporary measures to assist with corporate governance during the Covid-19 situation.

Moratorium for protection from creditors

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently reversed a bankruptcy court’s disallowance of postpetition interest at the default contract rate, holding that “the bankruptcy court erred in applying a liquidated damages analysis and ruling the default interest rate was an unenforceable penalty,” and also erred in weighing “equitable considerations” to avoid enforcing the contractual default interest rate.

The Coronavirus (Scotland) (No.2) Bill (the “Bill”) has been introduced by the Scottish Parliament today, 11 May 2020. The aim of the Bill is to respond to the financial impact the COVID-19 pandemic is having on individuals and small businesses (by that Scottish Ministers mean sole traders, not companies incorporated under the Companies Act 2006).