Hurstwood Properties (A) Ltd and others (Respondents) v Rossendale Borough Council and another (Appellants)

The Supreme Court has delivered its keenly anticipated judgment in a case concerning the validity of two business rates mitigation schemes. The schemes under scrutiny involved property owners letting unoccupied properties to special purpose vehicles (“SPVs”) which benefitted from a business rates exemption and therefore allowed both the property owners and the SPVs to avoid liability for business rates.

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.

This week’s TGIF considers the most recent case involving Gunns Limited where the Full Federal Court confirmed that the ‘peak indebtedness’ rule has been abolished in a partial win for Gunns creditor.

Key takeaways

Summary

The much anticipated judgement of Mr Justice Snowden in relation to a restructuring plan proposal (the “Plans”) made by Virgin Active Holdings Limited, Virgin Active Limited and Virgin Active Health Clubs Limited (the “Plan Companies”) was handed down on 12 May 2021.

On Monday, the High Court handed down its decision in (1) Lazari Properties 2 Limited, (2) The Trafford Centre Limited, (3) LS Bracknell Limited and 10 Others and (4) Fort Kinnaird Nominee Limited and 20 Others v (1) New Look Retailers Limited, (2) Daniel Francis Butters and (3) Robert Scott Fishman [2021] EWHC 1209 (Ch) considering the various grounds of challenge raised by the applicants in relation to the New Look CVA. Mr Justice Zacaroli rejected each of the grounds of challenge leaving the New Look CVA intact.

This week’s TGIF considers the decision of the Federal Court in In the matter of Thousand Angeles Island Pty Ltd (in liq) (No 2) [2021] FCA 283, where the Court held that only a ‘theoretical conflict’ existed for a liquidator entering into a deed where he was also bankruptcy trustee of the company’s sole shareholder.

Key takeaways

The Hungarian government has recently introduced a new restructuring tool with the aim of supporting companies suffering from financial difficulties due to COVID-19.

Financially distressed companies will receive an automatic stay while the company puts together a reorganisation plan, which will be supervised by a court and evaluated by a court-appointed expert.

This week’s TGIF considers an application to the Federal Court for the private hearing of a public examination where separate criminal proceedings were also on foot.

Key takeaways

The Corporate Insolvency and Governance Bill was published on 20 May 2020 and went through an accelerated parliamentary process, receiving Royal Assent on 25 June 2020 (with the provisions coming into force on 26 June 2020).

The Corporate Insolvency and Governance Act 2020 (“CIGA”) introduces a mixture of permanent and temporary “debtor friendly” measures to restructuring and insolvency law in England and Wales and in Scotland, jurisdictions which have historically been viewed as being “creditor friendly”.

Despite the scale of the pandemic and resulting build-up of Covid related rent arrears, currently estimated at around £4.5bn, business restructuring has been relatively muted. This is partly explained by the moratorium on forfeiture and other restrictions on landlords’ remedies, combined with unprecedented government financial support for struggling businesses.

But rent arrears cannot be pushed down the track indefinitely. As restrictions are eased and focus turns to tackling this debt, business restructuring activity will no doubt intensify.