As reviewed previously, the impact on Covid-19 losses will result in a steep increase in insurance claims under business interruption, public liability, product liability, employer’s liability, asset management, directors and officers, professional liability, errors and omissions, and marine insurance policies.

The Chancellor has committed to doing “whatever it takes” to save businesses and workers and, as part of a raft of measures, has pledged to pay 80% of staff kept on by employers.

THE ISSUE

In a recent judgment, i.e., on 17 January 2020, the Indian appellate insolvency tribunal, namely, the National Company Law Appellate Tribunal (NCLAT) held in M. Ravindranath Reddy v. G. Kishan, that the lease of immovable property cannot be considered as supply of goods or rendering any services and therefore the due amount cannot fall within the definition of operational debt under the Insolvency and Bankruptcy Code, 2016 (Code).

In the winter of 2015, the Indian Legislature sought to tackle the persistent problem of bad debts affecting Indian financial institutions and trade creditors by enacting the Insolvency and Bankruptcy Code, 2016 (“Code”), which was finally notified in May 2016. The key purpose of the enactment was to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons / entities. 

In today’s insecure commercial lettings market, it is becoming increasingly common for landlords to take a significant rent deposit when granting a new lease and to enforce their rights under the rent deposit deed. This is putting the drafting and enforcement of rent deposit deeds under scrutiny. How do the parties to a rent deposit deed protect their positions when the landlord assigns the reversion to the lease?

How do you spot a zombie company?

Zombie companies walk amongst us. They shuffle along, failing to realise that they are undead, relying on the inaction of creditors and low interest rates to mask their fundamental lack of profitability, poor growth prospects and inability to service their debts. Denied a swift, clean demise, they endure a twilight existence that deprives their living competitors of capital and opportunities.

Once I have a contract it is binding unless the other side goes bust – right?

One party to a contract cannot unilaterally change the deal – right?

If a commercial tenant does not pay its rent the landlord can forfeit – right?

As landlords have found to their cost this year, the answer is that a CVA can challenge all of these assumptions.

A misfeasance claim under section 212 of the Insolvency Act 1986 (IA) is often a race against time to gather evidence and bring a claim before the limitation period expires. Not only can the breach pre-date the liquidation by years, but the difficulty is even greater where there is a maze of group companies and intra-group transfers. It takes time to properly work out whether a simple transfer of assets between group companies is actually a corporate shield hiding misappropriated assets.

House of Fraser (HOF) has been in the headlines for months. It started with reports of widening losses and being dragged down by soaring costs and a drop in consumer sales, but official comment from the 169-year old retailer remained positive. Then there were rumours of CVAs and negotiations with landlords leading to further controversy. Finally, last Friday (10 August 2018), a stock market announcement delivered the news that Mike Ashley’s Sports Direct had brought House of Fraser out of administration for £90 million, just hours after the store had announced its collapse.

As if business leaders did not have enough to contend with in the current economic and geopolitical climate, the trend towards increased personal accountability for company directors is continuing and can be expected to increase further. How can directors protect themselves? As a start it is important for both executive and non-executive directors to understand the overarching principles involved and how they link together.

The basic duties set out in the Companies Act 2006