When finances become distressed, creditors examine all avenues to recover their debt which can result in any intercreditor agreements being thrown into the spotlight. The recent judgment of Re Arboretum Devon is another helpful reminder to lenders entering into an intercreditor agreement (ICA) that these should be drafted with the worst-case scenario in mind and using the clearest language in order to avoid disputes arising at the time of enforcement.

Last month, we discussed practical tips for dealing with contractor insolvency as part of our ongoing construction webinar series.

Our colleague, Doug Wass, has already shared three key points to be aware of when a contractor becomes insolvent. In this article we discuss, in more detail, the practical points clients and those administering building contracts on their behalf should consider when contractor insolvency is suspected and occurs.

Three weeks spent entirely at home seemed daunting at the time (little did we know…) and the prospect of wholesale business closures soon gave rise to serious concerns about the potential impact which those closures would have on the wider economy.

1. Introduction

With an increased number of businesses experiencing financial difficulties in the current economic climate, lender-led debt restructurings are becoming more prevalent. Such restructurings are commonly achieved by the lender releasing, capitalising or amending its debt, each of which will have tax consequences for the borrower group.

This note sets out a brief summary of some of the key UK tax points to be aware of, and pitfalls to avoid, when undertaking these debt restructurings.

Debt waivers

On 1 January 2021, the Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord, the “Dutch Scheme“) came into effect. At time of writing (25 February 2021), the Dutch courts have rendered 10 judgments in connection with the Dutch Scheme. This blog provides you with the highlights of this case law.

1. General observations

The Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – which introduces a framework allowing debtors to restructure their debts outside formal insolvency proceedings (termed the “Dutch Scheme“) – was adopted by the Dutch Senate on 6 October 2020 and will enter into force on 1 January 2021.

The government has once again suspended wrongful trading, this time until 30 April 2020. The government had previously suspended wrongful trading for the period between 1 March 2020 and 30 September 2020. To the surprise of many commentators in the insolvency profession the government let the first suspension lapse at the end of September. Perhaps because of the "second wave" of Covid-19 the government has seen it fit to revive the suspension.

The Act on confirmation of private restructuring plans (Wet homologatie onderhands akkoord) – which introduces a framework allowing debtors to restructure their debts outside formal insolvency proceedings (the “Dutch Scheme“) – was adopted by the Dutch Senate on 6 October 2020 and will enter into force on 1 January 2021.

Van de lasten onder dwangsom aan Alvat (1997) en DIT (2013) tot het kostenverhaal op Bavin (2014) en North Refinery (2019), de handhaving van milieurecht in faillissementssituaties blijft een uitdaging voor gemeenten, provincies en omgevingsdiensten. De rechtbank Rotterdam wil nu een einde maken aan alle onduidelijkheid.