Insolvency practitioners will welcome the confirmation that they cannot be expected to be aware of same degree of information as if company was still trading
The Court of Appeal has confirmed that although insolvent parties may refer disputes to adjudication, they will have difficulty enforcing adjudication decisions in all but exceptional circumstances
When companies face cashflow and other pressures, early action can assist with the assessment and mitigation of these risks
Events since the start of the decade have brought accelerated and transformative change across the UK business landscape and economy. The way businesses, employers and employees work and how business growth is driven has changed and is changing profoundly.
Government support during the pandemic and extremely strong credit markets saw exceptional fund raising levels in 2021, in spite of a slower Q4. Borrowers secured increasingly favourable terms from their lenders, with only a little pushback as the year progressed. Private credit continued to compete for greater market share and found interesting opportunities in smaller and more complex names. 2021 has proved to be a record year for financings and the continued availability of cheap capital, with reasonable stability and outperformance from riskier credits.
The restructuring plan has so far proven to be a powerful tool to facilitate restructurings of complex capital structures. Two recent cases provide further helpful guidance for advisers when formulating a restructuring plan and for investors who may be affected by its terms.
Amicus Finance plc (in administration) ("Amicus")
On 14 January 2022, it was published in the Official Journal of the Spanish Parliament, the draft law of the Insolvency Act for the transposition of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, debt waivers and disqualifications, and on measures to improve the efficiency of restructuring, insolvency and debt waiver procedures, and amending Directive (EU) 2017/1132 (Restructuring and Insolvency Directive) (hereinafter, the "Draft Law").
On 29 September 2021 the High Court dismissed a challenge to Caffè Nero’s 2020 CVA brought by one of its landlords, Ronald Young. Young asserted that the CVA was unfairly prejudicial and subject to material irregularities (thereby engaging both grounds of challenge under s.6 of the Insolvency Act 1986), and that the CVA nominees and company directors had breached their duties by failing to adjourn or postpone voting on the CVA upon receipt of a late-in-the-day offer for the Caffè Nero group.
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10 Regulations 2021) (the “Regulations”) will modify CIGA by extending certain restrictions on the use of winding up petitions, albeit on a more limited basis, in line with the tapering of government support measures introduced to combat the economic impact of COVID-19.
The English High Court has sanctioned the scheme of arrangement proposed by Provident Financial, by which the net liabilities of two Provident group companies to their redress creditors will be subject to a 90-95% haircut. This case raises two interesting questions.
Why was the scheme sanctioned when the recent Amigo Loans scheme was not?
Does the extension of pandemic protections risk creating 'zombie' businesses in the building sector?
The government has extended measures in the Corporate Insolvency and Governance Act 2020 (CIGA) to protect businesses during the pandemic until 30 September 2021.
The CIGA came into force on 26 June 2020. It introduced new procedures and measures to rescue companies in financial distress as a result of the Covid-19 pandemic.
Pandemic protection