Summary
On 21 March 2022, the High Court in Counsel General for Wales and others v Allen and others [2022] EWHC 647 (Ch) (Re Baglan Operations Ltd) modified the decision of the Official Receiver to allow the insolvent Baglan Operations Limited (in liquidation) (the 'Company') to continue trading for a period of time to prevent environmental harm to the locality.
As outlined in our previous briefing note on the Corporate Insolvency and Governance Act 2020, a new restructuring tool was introduced in June 2020 in the form of the Part A1 free-standing moratorium (the "Moratorium").
Welcome to the sixth edition of our quarterly disputes newsletter, which covers key developments in the dispute resolution world over the last three months or so.
We examine what impact the Court of Justice of the European Union decisions in Hampshire v PPF and PSV v Bauer will have on PPF compensation post-Brexit
The High Court has dismissed a challenge to Caffe Nero's company voluntary arrangement (CVA) in Young v Nero Holdings Limited. The Applicant in the proceedings, Mr Young, was a landlord of premises let to the First Respondent, Nero Holdings Limited (the Company) and challenged the Company's CVA under s 6(1)(a) and (b) of the Insolvency Act 1986 (the Act).
Background
The Corporate Insolvency and Governance Act 2020 (CIGA) came into force on 26 June 2020.
Schedule 10 of CIGA restricted the presentation of debt-related winding-up petitions where a company cannot pay its bills (including rent) due to COVID-19 in Great Britain.
These restrictions were initially due to end on 30 September 2020, but have since been extended until 30 September 2021.
The Current Position
In response to the COVID-19 pandemic, legislation was introduced during 2020 to prevent creditors filing statutory demands and winding up petitions on the basis of their debtor's inability to pay its debts, unless it could be shown that non-payment was not a result of the pandemic. These temporary measures had been extended a number of times during the pandemic as businesses continued to suffer the effects of multiple lockdowns and trading restrictions, but are now gradually being phased out.
The UK Government has announced a further extension to certain protective measures for businesses which are currently in place in response to the COVID-19 pandemic.
During the pandemic, the UK Government has put legislative measures in place to protect commercial tenants by preventing landlords from using certain remedies such as forfeiture and winding up petitions. However, the legislation does not specifically prevent a landlord from issuing debt claims against its tenants for arrears of rent and other amounts due under a lease (see the recent case of Commerz Real Investmentgesellschaft mbh v TFS Stores Limited [2021] EWHC 863 (Ch)).