In this case the court was asked to allow the convening of a meeting of creditors to consider and approve a scheme of arrangement by telephone and video conference in view of the Covid-19 pandemic. The meeting was proposed to take place on 20 July 2020 when there was likely to be an easing of the lockdown measure. The court approved the application and made the necessary order.
A similar order was made in a more recent case: Re ColourOz Investment 2 LLC and other companies.
The court held in this case that a costs order in favour of the debtor, in respect of a discontinued bankruptcy petition for the same debt, due to the petitioner, could be set off against the sums due in respect of a second bankruptcy petition brought against the debtor by the same petitioner. The debtor had argued that the petition should be stayed until the previous costs order had been paid.
The case concerned an insolvency practice which had been placed into compulsory liquidation. The Applicants had been appointed liquidators. However, between the presentation of the petition and the winding up order, the assets of the insolvency practice were transferred to another practice, resulting in a claim under section 127 IA86 to declare the transfer void. In addition, the liquidators sought to have transferred to themselves the insolvency cases of the two practitioners of the former practice. The application was by way of the block transfer procedure.
GOVERNANCE & SECURITIES LAW FOCUS
JULY 2020/EUROPE EDITION
Below is a summary of the main developments in U.S., EU, U.K. and Italian corporate governance and securities law since our last update in April 2020.
See our page dedicated to the latest financial regulatory developments.
IN THIS ISSUE
UK CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020
9 JULY 2020
IN THIS ISSUE:
Permanent Insolvency Changes A New Standalone Moratorium A New Restructuring Plan Ipso Facto Termination Clauses
Temporary Insolvency Changes Modification of Wrongful Trading Liability Statutory Demands Winding Up Petitions Winding Up Orders
Further Changes
Governance Changes Company Meetings Company Filings
Final Thoughts
On June 2, 2020, Judge Donald R. Cassling of the United States Bankruptcy Court for the Northern District of Illinois held that a state executive order suspending dine-in services to address the COVID-19 pandemic (the “Executive Order”) constituted a force majeure event that partially excused performance under the applicable lease agreement. In re Hitz Restaurant Group, No. 20-B-05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 2, 2020).
NORTHERN DISTRICT OF ILLINOIS BANKRUPTCY COURT HOLDS THAT EXECUTIVE ORDER BARRING RESTAURANT OPERATIONS ON-PREMISES IN LIGHT OF COVID-19 IS A FORCE MAJEURE EVENT THAT PARTIALLY EXCUSES DEBTOR RESTAURANT’S PAYMENT UNDER THE LEASE
Since publishing our first article about the impact of Covid-19 on commercial contracts the Government has published the Corporate Insolvency and Governance Bill, which is set to bring in a number of sweeping changes to UK insolvency law.
Following the introduction of the Corporate Insolvency and Governance Bill into Parliament on May 20, 2020, the U.K. government has published a series of guidance notes on the measures proposed in the Bill. The proposed measures, first announced by Secretary of State for Business, Energy and Industrial Strategy on March 28, 2020, are intended to protect companies and businesses facing major funding and operational difficulties in the current COVID-19 pandemic. Once final, the Bill will amend current U.K.
Questions from a landlord's perspective
My Tenant has asked for a rent holiday. I want to help them out at this time - how can I facilitate this?
Most landlords and tenants are working well together to reach agreement in respect of rent, either moving rental payments to monthly rather than quarterly in advance, or deferring rental obligations for a specified period. It is obviously preferable, but not necessarily essential, to have such arrangements documented in writing, as follows: