The COVID-19 pandemic created unprecedented disruptions across the global economy, perhaps most severely in the retail sector. Shelter-in-place orders, government-mandated closures and other restrictions drastically reduced or entirely wiped out revenue streams, resulting in an increased number of bankruptcy filings by retail debtors.
A week is often described as a long time in politics, and so also (it seems) with the restructuring market.
Last week, we saw significant strides forward with:
The restructuring market has been eagerly anticipating the judgments in the New Look and Regis CVA challenges. The New Look judgment was handed down on 10 May 2021 and the Regis Judgment followed on 17 May 2021. This article briefly sets out the issues in the New Look CVA challenge, the decision of Mr Justice Zacaroli and what this means for the future of CVAs.
Overview of the New Look CVA Challenge
The claim brought by the Applicants (a consortium of compromised landlords) can be summarised briefly under three heads of claim:
Employees working for an insolvent company will have to be given at least 30 days’ notice of redundancy under new legislative reforms to be introduced by the Government. The proposal is part of a new Department of Enterprise, Trade and Employment Action Plan to boost the rights of employees hit by insolvency.
Currently, collective redundancies cannot take effect until after a statutory 30 day period of notification to employees. This does not apply to collective redundancies triggered by insolvency but the Government is now planning to remove that exemption.
Landlords of New Look stores have failed in their challenge to a CVA which wrote off rent arrears and imposed turnover rents on hundreds of stores.
Like so many high street fashion retailers New Look was already in a precarious position before the pandemic hit. When its turnover was reduced to nil overnight it projected it would run out of cash without help.
The media is brimming with articles on the rise of cryptocurrencies and digital assets. Whether it’s news on the rising value of Bitcoin, the acquisition of digital art for large amounts of money, the release of the latest Kings of Leon album as an NFT (non fungible token), or articles on people who have invested in cryptocurrency scams, crypto assets are taking center stage.
The Insolvency Service published its quarterly insolvency statistics for the period January to March 2021 (Q1 2021) on 30 April 2021. By way of comparison, see our previous update on the Q4 2020 statistics here.
The published statistics for the first quarter of 2021 continue the downward trend seen in the previous 12 month period, with company insolvencies falling overall by 22% from the previous quarter.
Almost a year has now passed since the Corporate Insolvency and Governance Act 2020 (CIGA) first entered force on 26 June 2020. According to the Explanatory Notes that accompanied CIGA, “the overarching objective of [the Act] is to provide businesses with the flexibility and breathing space they need to continue trading during this difficult time”. To this end, CIGA introduces a number of permanent and temporary amendments to the UK’s insolvency landscape which are aimed at ensuring businesses can maximise their chances of survival against the backdrop of the COVID-19 pandemic.
- A veszélyhelyzeti jogalkotás részeként a napokban kihirdetésre került egy több rendeletből álló jogszabálycsomag[1], amelynek egyik fő eleme a veszélyhelyzet során a vállalkozások reorganizációjáról szóló 179/2021. (IV. 16.) Korm. rendelet („Reorganizációs Rendelet”).
The UK Restructuring Plan took its first foray down the well-trodden path of lease restructuring over the last week. The Restructuring Plan has been used through to court sanction in five cases so far: however, none has sought to compromise landlord claims, the preferred tool for which has until now been the CVA.