In this three part blog we highlight three recent court decisions concerning landlord rights and insolvency, which provide cautionary warnings and surprising twists. The questions we consider are:
- Does a company voluntary arrangement (“CVA”) permanently vary the terms of a lease?
- Can a landlord be forced to accept a surrender of a lease?
- What are the consequences of taking money from a rent deposit if the tenant company is in administration?
In part 1 we consider the first question.
Under German law, there are strict legal obligations for the managing directors of an insolvent company to file for insolvency. Failure to comply exposes a managing director to civil and criminal liability. It is therefore important for managing directors to know how to test whether their company is insolvent. One of the legal reasons for insolvency is illiquidity and the second senate of the German Federal Civil Court (“BGH”) has, in a decision dated 19 December 2017 (II ZR 88/16), clarified a question regarding the illiquidity test.
The High Court has recently demonstrated its right to exercise discretion as to whether an administration order should be made in relation to a company. In Rowntree Ventures v Oak Property Partners Limited, even though the companies were unable to pay their debts and where the statutory purpose of administration was likely to be achieved, the Court exercised its commercial judgment in determining that it was premature to make an administration order.
Background
Directors' Duties and Related Matters, in the Context of COVID-19
EMEA UK 2 July 2021
Scope and Purpose of This Note
This note summarises the duties that directors of companies incorporated in England and Wales are subject to.
This note explains those duties, and matters that directors should consider in relation to them, in the context of the COVID-19 pandemic.
There has been a significant increase in the use of CVAs, in particular in the retail and hospitality sector over the last 12 to 24 months, largely impacting landlord creditors. Consequently, there has been an increase in landlords challenging CVAs.
Landlords (and other creditors) may apply to court to challenge a CVA on the grounds of material irregularity or unfair prejudice.
The Australian government has taken swift action to enact new legislation that significantly changes the insolvency laws relevant to all business as a result of the ongoing developments related to COVID-19.
This quick guide summarises the duties that a managing director of a German GmbH (hereinafter "director") is subject to, and how those duties change when the company is insolvent or at risk of being insolvent.
It also gives an overview of the personal risk to directors when the company is in financial difficulty.
E-filing a notice of appointment of administrators outside of court counter opening hours can impact the validity of an administrator’s appointment.
One of the many questions asked by our clients is: “Does Polish law recognise the concept of ‘piercing the corporate veil?’” Is it possible to disregard the separate legal personality of a company or corporation and make shareholders liable for the debts of the company? This question has been asked since the introduction of the market economy in Poland (in 1989) and there is still no clear answer.
This note summarises the duties that directors of companies incorporated in England and Wales are subject to
This note summarises the duties that directors of companies incorporated in England and Wales are subject to.
This note explains those duties, and matters that directors should consider in relation to them, in the context of the COVID-19 pandemic.