Pensions and insolvency legislation uses the test in the Insolvency Act 1986 for assessing whether a person is ‘connected’ or ‘associated’ with another. This test is important because various statutory provisions use it, especially in limiting the persons whom the Pensions Regulator can make responsible for pension scheme deficits under the ‘moral hazard’ powers in the Pensions Act 2004. This briefing gives an outline of the statutory provisions and points to some difficult areas.  

Why is this relevant?  

At the COP26 climate summit in November 2021, over forty countries committed to phase out use of coal-fired power.

The UK's latest quarterly company insolvency statistics, published on 29 October, suggest that the unexpectedly calm seas seen over the last 18 months (and maintained by unprecedented government economic support) may be starting to give way to stormier waters as corporate insolvencies begin to return to pre-pandemic levels.

Since the beginning of the COVID-19 pandemic, the Spanish Government has approved a number of financial support measures to address companies’ liquidity requirements, including the creation of two guarantee schemes (líneas de avales) managed through the Spanish Official Credit Institute (Instituto de Crédito Oficial – ICO) in relation to financings granted to companies and the self-employed:

Following a quick procedure, the Netherlands has seen its first ever court-approved private restructuring plan permitted under the WHOA (Wet homologatie onderhands akkoord), introduced on 1 January 2021.

John Doyle Construction Limited (in liquidation) v Erith Contractors Limited sees the first consideration of a claim for summary enforcement of an adjudication decision by a company in liquidation following the Supreme Court’s decision in Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited.

On 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force. The Act marks the most significant insolvency reforms in a generation. It doesn’t just deal with measures required to tide companies through the COVID-19 pandemic but includes far-reaching wholesale reforms to the UK’s restructuring toolbox, including the introduction of the restructuring plan, which has the potential to be a gamechanger for restructurings.

There are two temporary measures dealing with COVID-19 impacts on companies specifically:

One of the key issues facing all public companies during the COVID-19 crisis is how and when to update necessary market disclosures relating to the risk impact of the pandemic on their business.

History has taught us that prolonged periods of market volatility increase the risks of litigation against both companies and their governing boards, and that the way in which they act now can have long-lasting effects.

Some companies may face severe solvency issues, which will lead to questions around the disclosure of the company’s financial position.

In the recent decision of Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation) [2018] EWHC 2043 (TCC), Fraser J found that parties cannot resolve their disputes by means of adjudication where a company in liquidation and its counterparty both claim a pre-liquidation entitlement to payment of money by the other.

This briefing covers Brexit implications of restructuring and insolvency, in particular it discusses the implications on the European Regulation on Insolvency Proceedings and recognition of insolvency judgments and how schemes of arrangement will be impacted by Brexit.