On 20 May 2020, the Corporate Insolvency & Governance Bill 2019-2021 was introduced to Parliament. With the Bill slated to be fast-tracked into law, here are some of the key insolvency aspects to be aware of.

Why now?

Hot off the press, yesterday we learnt a great deal more about the proposed suspension of the UK’s wrongful trading laws with the publication of the Corporate Insolvency and Governance Bill 2019-21.

Although the contentious background to the applications to restrain the presentation of two winding up petitions heard together in (but only listed singularly as) the case of Shorts Gardens LLB v London Borough of Camden Council [2020] EWHC 1001 (Ch) is somewhat unusual, these cases nonetheless raise some interesting points of principle which may be used by the courts in determining whether it is appropriate to restrain or dismiss a winding up petition due to COVID-19.

The extraordinary disruption to UK business caused by the COVID-19 lockdown has spawned much discussion about changes to existing insolvency laws to help businesses which are struggling to survive in this abnormal environment. One topic of discussion has been the so-called ‘light touch’ administration. Here we provide a quick overview of what this involves.

What do we mean by a ‘light touch’ administration?

The question whether a counter claim filed against a Corporate Debtor is liable to be stayed during moratorium has been considered by the Courts/NCLT/NCLAT time and again. Since its inception, the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) has been a hotbed of discussions and debates amongst the legal experts. Under the Code, the concept of moratorium is envisaged under Section 13 and 14 and provides for a time period within which the following against the Corporate Debtor are prohibited:

Can a company in liquidation adjudicate? Balfour Beatty Civil Engineering Limited & Anor v Astec Projects Limited, or what happens when an irresistible force meets an immoveable object?

“Art is born when the temporary touched the eternal; the shock of beauty is when the irresistible force hits the immoveable post” G K Chesterton

INTRODUCTION:

The Insolvency and Bankruptcy Code, 2016 (‘Code’) was enacted by the Parliament with the aim to provide and revamp the framework for insolvency resolution in India in a time bound manner and for the promotion of entrepreneurship, credit availability and balancing of different interests of each and every stakeholder of a Company.

“Your Courage, Your Cheerfulness, Your Resolution; Will Bring Us Victory” – Ministry of Information, 1939

The phrase “unprecedented times” seems to crop up in almost every recent article and news report and there is no doubt that it is a true statement. It is therefore rather nice that some things are reassuringly the same. This is true of my recent experience of advising on a number of adjudications, in this period of lock-down.

It is now common knowledge that the Government has responded to the COVID-19 crisis with a number of protective measures, including the Coronavirus Job Retention Scheme (CJRS), which provides support to businesses that cannot maintain their current workforce because their operations have been severely affected by COVID-19. Under the CJRS, employers can apply for a grant to cover 80% of the wages (up to £2,500 per month) of employees who are placed on furlough leave.

Legal opinions can be complex, and certain areas require the provision of reasoning to support the opining firm’s conclusion. Parties should discuss and agree the scope of legal opinions as early as possible within the life cycle of a deal. This article discusses some common areas for consideration.

WHAT IS A LEGAL OPINION AND WHY IS IT USED?

Legal opinions are formal letters typically provided to confirm a specified legal position in relation to a document or a suite of transaction documents.

For example, a firm practising English law may be asked to opine on whether: