What new measures have been introduced by the UK government to provide further support to commercial tenants struggling to pay rent?

Speed read

The High Court has recently ruled that the agreement between the liquidator of a company and the parent of that company, which contemplated the transfer of all of the assets of the company to the parent gave rise to a trust arrangement on the facts of the case. As a consequence of that trust arrangement, lands which were inadvertently not transferred by the liquidator in the course of the liquidation were deemed not to have vested in the State when the company was dissolved, as would otherwise have been the case under the State Property Act, 1954.

The COVID-19 global crisis has brought cross border insolvencies into focus as companies consider the challenges that may arise where assets are situated across a number of jurisdictions and where an insolvency event may occur. Drawing on our experience of cross border restructurings, and the issues that should be considered, we look at the key issues to consider when assessing if you should implement a restructuring where an Irish company is involved and which restructuring tool to avail of.

Directors are facing difficult decisions in the current climate but, while the impact of COVID-19 will continue to be felt, it does not follow that companies should be forced out of business. Our publication 'Saving viable businesses – a look at restructuring options in the current environment' serves as reminder of rescue procedures available under Irish law.

Businesses in all sectors are facing very challenging times arising from the outset of, and reaction to, the Coronavirus (COVID-19). With the challenges in some instances being unprecedented, directors of affected companies need to be cognisant of their duties especially around decisions they are looking at making to get through current difficulties

Overview

The recent approval by the Irish High Court of a scheme of arrangement that restructured US$1.65bn of liabilities of Ballantyne Re plc (Ballantyne) confirms Dublin as one of the most effective restructuring venues in the EU. The detailed decision of Justice Barniville (available here) offers significant precedential value and is a clear endorsement that Irish schemes can be used to implement complex cross border restructurings. The Irish statute governing schemes is very similar to that of England and Wales.

Essence of the Ballantyne scheme:

The government's response to the recent Insolvency and Corporate Governance Consultation has increased the emphasis on flexibility and the restructure and rescue of businesses. However, along with the recent October Budget, there are proposed reforms which are set to increase the focus and accountability for directors of companies.

Preliminary Moratorium

One of the key new proposals to be introduced with the aim of rescuing companies is a "Preliminary Moratorium".

The Dutch Supreme Court has confirmed the decision of the Amsterdam Court of Appeal, which found that the bankruptcy of the Russian based oil company, Yukos, could not be recognised in the Netherlands because it violates Dutch public policy.

The High Court of Hong Kong refused to allow a Chapter 11 Trustee to disclose a Decision from Hong Kong winding up proceedings in the US bankruptcy court. The US proceedings were commenced to prevent a creditor from taking action following a breach of undertakings given to the Hong Kong court in circumstances where the company had no jurisdictional connection with the US.

The Australian Federal Court has clarified the limitations for foreign entities and their office holders in pursuing action in Australia to access the voidable transaction provisions of the Australian Corporations Act.