The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (the Bill) has received its first and second readings in the House of Commons and is expected to come into law later this year. But what is this Bill and what does it mean for charities?
The Bill introduces important changes to the insolvency and director disqualification regime in England and Wales and will have implications for incorporated charities including charitable companies and charitable incorporated organisations (CIOs), as well as any trading subsidiaries that your charity may have.
The Insolvency Service has today (9 September 2021) announced a phased end (commencing on 1 October 2021) to the temporary insolvency measures which remain as a result of the Corporate Insolvency and Governance Act 2020 (CIGA) and the various extensions to the relevant period (announcement).
The headline measures are as follows:
The latest announcements
Suffering with mental health problems and being in financial difficulty are often strongly linked, with one frequently causing or worsening the other. The introduction of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (referred to in this article as the ‘debt respite regulations’), which, with very limited exceptions, came into force on 4 May 2021, allows an eligible individual breathing space from any action a creditor may take for a ‘problem debt’.
Not only was 4 May Star Wars Day this year, it was also the day The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (referred to in this article as the ‘debt respite regulations’) came into force.
The High Court dismissed landlords’ challenges to the terms of New Look’s company voluntary arrangement (CVA) last week in a ruling that has sparked lively debate within both the landlord and restructuring sectors.
The landlords challenged the CVA by way of three main limbs:
It is unfortunately a common story for anyone who has been in business for any length of time: the unscrupulous director who, rather than confront creditors in an insolvency process, simply disappears as if by magic by dissolving the company and re-appearing elsewhere moments later, leaving creditors clasping nothing but smoke. This loophole has frustrated creditors for many years as it means their only remaining option is a commercially unattractive application to restore the company to the register in order to petition to place the company into compulsory liquidation.
Although not a new concept, use of the reverse vesting order (RVO) structure to effect distressed M&A transactions in proceedings under the Companies’ Creditors Arrangement Act (Canada) (CCAA) has quickly gained popularity in Canada over the last year. At its core, an RVO transaction involves a transfer of unwanted assets and liabilities — the “bad assets” — out of a distressed company into a newly established non-operating subsidiary, leaving the distressed business entity with only the “good assets” left to be acquired.
Le 1er avril 2021, la Cour suprême du Canada a rejeté la demande d’autorisation d’appel de la décision de la Cour d’appel du Québec dans l’affaire Séquestre de Media5 Corporation, 2020 QCCA 943. Par conséquent, les tribunaux du Québec ont maintenant confirmation de la marche à suivre pour la nomination de séquestres nationaux à la demande des créanciers garantis.
Le 20 juillet 2020, la Cour d’appel du Québec annulait la décision rendue par la Cour supérieure et confirmait les principes suivants :
On April 1st, 2021, the Supreme Court of Canada dismissed the application for leave to appeal the decision of the Court of Appeal of Québec in Séquestre de Media5 Corporation, 2020 QCCA 943. As a result, Quebec courts now have clarity regarding their ability to appoint national receivers for secured creditors.
On July 20, 2020, the Court of Appeal overturned the lower court’s decision and confirmed the following principles: