An administration is intended to achieve one of two objectives: 1. to rescue the company as a going concern; or 2. to achieve a better result for the company's creditors as a whole than would be likely if the company was placed into liquidation
Amidst the cost of living crisis, businesses are folding in record numbers, with barely a week passing without news of a big company casualty. Paperchase is the latest retailer to collapse into administration, with the business being snapped up by Tesco for sale in its superstores and 820 jobs reportedly at risk. So how can we identify the businesses that are in the danger zone and could be heading for insolvency?
1. Profit warnings
Introducción
Esta edición tiene esta vez bastante contenido interesante entre el que destacamos:
Background to this overview
The below overview is deemed to be a high-level overview providing the general outlines of the legal Luxembourg framework applicable to the members of the management board in private limited liability companies (sociétés à responsabilité limitée) (an “SARL”) in times of financial distress.
While many businesses (particularly in the retail, leisure and hospitality industries) will have been hoping to capitalise on a busy festive period, sadly for many the busy period came too late as corporate insolvencies rose again in December. Overall, company insolvencies were 32% higher than December 2021, and 76% higher than in December 2019 (i.e.
1. My tenant is in administration, do they have to pay the full rent and is the administrator personally liable?
The company in administration has to pay rent as an administration expense for each day that the company occupies or uses the property for the benefit of the administration. The administrator is not personally liable, but the rent is payable as a priority expense ahead of the administrator's fees.
There have been some very gloomy stories in the press over the last week or so about rising company insolvency rates. All rather unwelcome during the season of goodwill.
Everyone knows that British businesses are facing a hugely difficult time with challenges coming from all directions – including high energy bills, rising interest rates, strikes, geopolitical uncertainty etc. etc.
But amidst the gloom there are some positives. For example:
As the chill of recession bites for homes and businesses alike, SMEs are faced with the daunting prospect of navigating their way through the bleak mid-winter. In October 2022, inflation reached 11.1% and company insolvencies were 38% higher than the same period last year. Creditors’ voluntary liquidations in the same period were 53% higher than in 2019 (i.e. pre-pandemic), continuing the theme of businesses being forced to consider this terminal insolvency process, as following the pandemic they have struggled to adapt to the challenging market conditions.
Introducción
En las Píldoras de este mes de noviembre destacamos dos sentencias de audiencias provinciales:
la de la AP de Tarragona que anula la garantía hipotecaria de la filial en favor de la deuda de su matriz a pesar de que había sido la matriz quien le aportó los fondos para comprar los inmuebles que se hipotecan. La audiencia adapta la doctrina de la compensación equivalente y considera que se sacrifica más de lo que se gana y por tanto el sacrificio patrimonial es injustificado.
Careful contract negotiation can limit the potential damage from insolvency in a construction firm’s supply chain.