In the recent decision of Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited, the Supreme Court has overturned the Court of Appeal in upholding the practicality of adjudication by insolvent companies.
The High Court has held that s.236 of the Insolvency Act 1986 (“IA 1986”) does not have extra-territorial effect, so that the court is not generally permitted to make an order requiring a person outside the UK to produce books and papers and give an account of their dealings with an insolvent company: Re Akkurate Ltd (in Liquidation) [2020] EWHC 1433 (Ch).
On June 22, 2020, the Federal Energy Regulatory Commission (“FERC” or “Commission”) issued an order concluding that the Commission and the United States Bankruptcy Courts have concurrent jurisdiction to review and address the disposition of natural gas transportation agreements (“FERC-jurisdictional agreement”) sought to be rejected through bankruptcy.
Both commercial landlords and tenants continue to struggle from governmental lockdowns and financial pressures. Recent bankruptcy decisions have added an additional layer of financial distress on commercial landlords by: (i) reducing commercial tenants' rent based on the subject lease's force majeure provision and governmental pandemic orders and (2) ignoring commercial tenants' requirement of timely payment of post-bankruptcy rent and allowing commercial tenants to "pause" payment of rent consistent with the governmental “stay” orders issued because of the COVID-19 pandemic.
Oliver Hyams and Amy Held investigate the recent case of Islandsbanki Hf & Ors v Stanford [2020] EWCA Civ 480.
Background
NORTHERN DISTRICT OF ILLINOIS BANKRUPTCY COURT HOLDS THAT EXECUTIVE ORDER BARRING RESTAURANT OPERATIONS ON-PREMISES IN LIGHT OF COVID-19 IS A FORCE MAJEURE EVENT THAT PARTIALLY EXCUSES DEBTOR RESTAURANT’S PAYMENT UNDER THE LEASE
The Supreme Court has handed down its decision in Bresco Electrical Services Ltd v Michael J Lonsdale [2020] UKSC 25. It has returned the law to where it was before the first instance judgment and has made a firm statement that there is jurisdiction for insolvent construction companies to refer a dispute to adjudication. In the unanimous decision of the Court, Lord Briggs concluded that the operation of insolvency set off and the adjudication of construction disputes are not only compatible, but they are to be encouraged.
Urteilsanmerkung zu BFH, Urteil vom 22.10.2019 – VII R 30/18
In previous blogs, we’ve discussed the temporary changes to the law being brought about by the UK Government’s Corporate Insolvency and Governance Bill. The Bill is set to strip Landlords of some of the tools available to recover arrears from their tenants. It will render statutory demands served between 1 March to 30 June 2020 ineffective, while making it near impossible for landlords to liquidate tenants (by winding them up) if they have been financially affected by COVID-19.
Samantha Gilbert speaks to compliance leaders from the healthcare, financial services, insurance, IT and commercial sectors on what to expect from the new “business as usual” and enforcement. Conduct reviews, increased regulatory scrutiny and long-term digitisation are some key issues for compliance teams to prepare for.