Real Estate Quarterly

Summer 2020

Contents

This newsletter is written in general terms and its application in specific circumstances will depend on the particular facts.

If you would like to receive this newsletter by email please pass on your email address to one of the editors listed below.

The (the CIG Act) received Royal Assent on 25 June 2020 and effects wide ranging changes.

For many years, Machiavelli Ristorante Italiano in the Sydney CBD was the place for the business and political elite to be seen and to talk business.

More recently, the Supreme Court of New South Wales was the place for the new owners of the Machiavelli Ristorante to be seen to litigate their partnership disputes.

The case is In the matter of Bicher & Son Pty Ltd [2020] NSWSC 711 (9 June 2020) (Black J).

The rapidly changing impact of COVID-19 on companies and the wider economy presents directors with the unenviable task of balancing the immediate need to secure the survival of their company against the longer-term implications for their stakeholders. In March, the UK Government announced that wrongful trading measures would be temporarily suspended to ease this pressure. The suspension measures are included in the Corporate Insolvency and Governance Act 2020, which introduces both temporary measures, such as this, and permanent and significant changes to UK insolvency law.

The Corporate Insolvency and Governance Act received royal assent on 25 June 2020 and comes into force immediately.

The Act introduces a range of new corporate restructuring tools and suspends, temporarily, parts of the existing insolvency regime. The purpose of this note is to update you on two key aspects of the Act: the moratorium on legal action and the temporary changes in relation to statutory demands and winding-up petitions.

Moratorium on legal action

Background

On 17 April 2020 the Supreme Court handed down an important interim judgment concerning the pre-pack bankruptcy of Heiploeg. In this judgment, the Supreme Court holds that the rules on the Transfer of Undertakings (as explained further below) do not apply to a restart following bankruptcy. In addition, the Supreme Court holds that the rules on the Transfer of Undertakings do not always apply in the case of a restart that has been prepared by means of a pre-pack. The Supreme Court takes the view that in the pre-pack bankruptcy of Heiploeg these rules do not apply.

PRIVATE CLIENT UPDATE: Issue no. 11, July 2020

Introduction

The Corporate Insolvency and Governance Act 2020 received Royal Assent and is now in force.

How do you safeguard your interests if you find yourself dealing with a company that enters an insolvency process or is at risk of insolvency, whether as a contract counterparty or in a dispute? Conversely, if you find prospective contract counterparties raising concerns about your company's solvency, what protections might you be able to offer your counterparty in order to continue the relationship?