On Saturday (28 March 2020) the UK Government announced certain changes to insolvency laws in response to COVID-19, intended to help companies and directors.
There are two aspects to the changes:
Retrospective suspension or relaxation of wrongful trading
New restructuring procedure and new temporary moratorium
In a recent decision in the Supreme Court of NSW[1], Rees J set aside a liquidator’s bid to publicly examine two senior officers of the National Rugby League (NRL), finding that examination summonses issued by the liquidator were an abuse of process and the entire liquidation process was a contrivance in order to exert commercial pressure on the NRL.
Introduction
On Saturday (28 March 2020) the UK Government announced certain changes to insolvency laws in response to COVID-19, intended to help companies and directors.
There are two aspects to the changes:
Correct as of 16.00 on 24 March 2020. This article is being maintained.
The global COVID-19 outbreak is presenting businesses with unprecedented challenges. In the last two weeks the UK Government has announced a raft of COVID-19 liquidity and tax assistance measures for businesses and individuals.
The Coronavirus Economic Response Package Omnibus Bill 2020 (Coronavirus Response Bill) was passed on 23 March 2020 and received Royal Assent on 24 March 2020 following the Federal Government’s announcements made between 12 and 22 March 2020 of its economic response to the spread of the coronavirus pandemic.
The Coronavirus Response Bill provides, amongst other legislative amendments, for temporary changes of 6 months’ duration to Australian insolvency and corporations laws to assist in managing the sudden economic shock resulting from COVID-19.
Last September we reported on the Court’s decision on the landlords’ challenge to the Debenhams CVA on grounds of unfair prejudice and material irregularity, in respect of which the landlords have now successfully obtained permission to appeal on various grounds (see below).
In its recent decision in the ongoing Solar Shop litigation,[1] the Full Federal Court established two key principles which will have significant ongoing implications for the conduct of unfair preference claims:
Introduction
The decision of ICC Judge Barber in the case of Stephen Hunt & System Building Services Group Limited -v- Brian Michie & System Building Services Group Limited [2020] EWHC 54 (Ch) was recently handed down and it is an interesting decision about directors’ duties post the appointment of an administrator or liquidator.
Facts
The facts are quite involved and matter specific, and gave rise to a number of issues, but for present purposes the key issues are as follows.
On 25 February 2020, the High Court handed down an important ruling: Granville Technology Group Limited (In Liquidation) and Others v Elpida Memory (Europe) Gmbh and Others [2020] EWHC 415 (Comm). This is the first ruling by an English Court on how the Limitation Act 1980 should be applied to secret cartel claims.
Pension Schemes Bill – Additional hurdle for English law restructurings?
The intention was that the Pension Schemes Bill would enhance the Pensions Regulator’s powers to respond earlier when employers fail to take their pension responsibilities seriously, targeting “reckless bosses who plunder people’s pension pots”. However, the new criminal offences proposed as part of the Bill may inadvertently create additional hurdles for English law restructurings, making them potentially more expensive and difficult.