Looking into the crystal ball at the start of the year to forecast future trends isn’t possible, but one common theme that we expect will continue to impact upon both directors and officers and insolvency practitioners (IP) is the increasing rise of corporate insolvencies.
Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.
What's in a name?
A judge has found that insurers were liable to indemnify an insured despite its insurance policy specifying the incorrect name.
The case relates to 'The George in Rye' pub which was damaged by a fire in July 2019. While the named insured was “George on High Ltd t/a The George in Rye”, a separate company (George on Rye Ltd (GoR)) owned the restaurant and hotel business operating in the property.
2023 marked the highest annual number of corporate insolvencies since 1993, according to figures released by The Insolvency Service this week. While creditors’ voluntary liquidations remained by far the most commonly used process, 2023 saw increases across all processes tracked by the Insolvency Service.
Recent news reports have highlighted that the number of corporate insolvencies has continued to rise during 2022 and 2023, with the retail sector being particularly affected. Many companies are struggling to meet the demands of repaying government support provided during lockdown, increased running costs and high wages coupled with lower demand due to the cost of living crisis.
UK Restructuring A YEAR IN RETROSPECT 2 Contents Introduction Our people UK team Matter Highlights UK Restructuring Employment UK Restructuring Section Header Section Header Contents 3 Robert Russell UK Head of Restructuring +44 (0)161 235 4147 [email protected] 2023 – Continued instability Casting our minds back to January last year, the economic outlook was fraught with uncertainty.
On the eve of trial, the Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, has discontinued disqualification proceedings brought in January 2021 against five former non-executive directors (NEDs) of Carillion plc. The trial, which had been listed for around 13 weeks (and originally as long as 6 months) had been due to start on Monday 16 October 2023.
The Insolvency Service (IS), acting on behalf of the Secretary of State for Business and Trade, commenced disqualification proceedings against five former non-executive directors (NEDs) of Carillion plc in January 2021, following the compulsory liquidation of the Carillion Group in January 2018. Last month on the eve of trial, the IS discontinued its disqualification proceedings against the NEDs.
On 12 September 2023, the government published its long-awaited response to its consultation on the future of insolvency regulation.
The reforms will introduce:
The Insolvency Service has published its official three-year Post Implementation Review of the Corporate Insolvency and Governance Act 2020 (CIGA). The Review focused on the three permanent measures:
As far as they go, restructuring plans have worked well since they were first introduced 3 years ago. This is reflected in the most recent review of CIGA published by the Insolvency Service which reflects favourably on this new insolvency measure. However, there are still some barriers to its use.