The UK Government has issued secondary legislation extending the period of applicability of certain temporary provisions of the Corporate Insolvency and Governance Act 2020 (“CIGA”).

InTelnic Ltd v Knipp Medien und Kommunikation GmbH [2020] EWHC 2075 (Ch), Sir Geoffrey Vos sitting in the English High Court ruled that where a debt is governed by an arbitration agreement, it is appropriate for the Court to stay or dismiss a winding up petition without investigating whether the debt is disputed in good faith and on substantial grounds.

This case provides guidance on the high threshold a creditor will have to cross in order to be able to present a winding up petition for sums due under an agreement with an arbitration clause.

The Corporate Insolvency and Governance Act 2020 completed ‘ping pong’ in the House of Commons on the afternoon of 25 June 2020, received Royal Assent at 18:08 the same night and took eff ect the following day, 26 June 2020.

At 254 pages, it covers a lot more than just statutory demands and winding-up petitions, including a new company moratorium procedure, but for property folk the immediate impact is that it eff ectively removes the statutory demand/winding-up route against defaulting tenants until at least 30 September.

The tragically unforeseen current novel coronavirus (COVID-19) global pandemic has brought unprecedented challenges to all aspects of Hong Kong society including the health of its citizens, the economy and the business community. Economic activities across most sectors globally are being devastated. The dire economic situation in Hong Kong has been exacerbated by the trade war between Washington and Beijing and the new national security law.

As the lockdown restrictions ease and employers slowly return to more normal ways of working, it is unfortunately inevitable that the impact of the coronavirus means some businesses will have to implement restructures and redundancies in order to survive.

This article looks at the key employment law provisions in restructuring/redundancy situations and offers practical guidance for managing these challenging processes.

Restructures and reorganisations

On 1 August 2020, amendments to Act XLIX of 1991 (the Insolvency Code) are scheduled to come into force, which have been designed to promote the cooperation between debtors and creditors in bankruptcies and allow for the use of electronic communications in insolvency procedures.

The key changes contained in the amendments include the following:

Pre-emption right for the Hungarian state

Businesses continue to face a challenging environment owing to the global COVID-19 crisis and consequent measures introduced by governments worldwide. The scope and nature of these measures is constantly evolving, with the focus now shifting to an easing of restrictions and facilitating a bounce back of the economy. As part of their response to such measures, businesses will be continuing to look at how best to deal with potential contractual disputes, or considering if some contracts can be terminated.

The UK has introduced a new restructuring tool, the Restructuring Plan, which when coupled with other provisions of the new law creates the possibility of the management of a company in financial difficulty remaining in control of a process designed to turn the company around as a going concern whilst in many cases having the benefit of a moratorium. Sounds a little like Chapter 11 in the US?

We examine whether the Restructuring Plan will offer aviation companies in the UK (and elsewhere?) a potential route to deal with the difficulties caused by the COVID-19 pandemic.

Background

Insolvency termination clauses in Supply Contracts

What are the potential implications of the new measures in relation to contracts for the supply of goods or services set out in the Corporate Insolvency and Governance Act 2020 (the “Act”) for aircraft lenders, lessors and airlines? In the second of a series of three articles, we consider the new prohibition on suppliers invoking termination clauses (or changing other terms) upon an insolvency or formal restructuring process introduced in the Act.