The detrimental impact of the Corporate Insolvency and Governance Bill on defined benefit (DB) pension schemes and the Pension Protection Fund (PPF) has been highlighted forcefully by peers in the first sitting of the Committee stage in the House of Lords, which took place yesterday. The leading statements made by peers, together with the Government’s response from Lord Callanan can be found below.

Ever since governors across the country implemented Stay at Home orders to slow the spread of COVID-19 by closing non-essential businesses, experts have debated whether a force majeure provision of a lease would excuse a tenant’s obligation to pay rent.

As concerns about illegal phoenix activity continue to mount, it is worth remembering that the Corporations Act gives liquidators and provisional liquidators a powerful remedy to search and seize property or books of the company if it appears to the Court that the conduct of the liquidation is being prevented or delayed.

Force majeure clauses and the doctrines of impossibility and/or impracticability remain among the most-discussed legal topics of the COVID-19 pandemic. Courts across the country, finally open, are grappling with those issues and giving some insight as to how these topics may play out in future cases.

Facts

Snowden J heard two applications for injunctions to restrain the presentation of two winding-up petitions, against Saint Benedict's Land Trust Limited (SBLT) and Shorts Gardens LLP (SG), respectively. The respondent creditors were Camden and Preston councils in relation to unpaid liability orders in respect of NNDR (National Non Domestic Rates) and other unpaid costs orders.

The Corporate Insolvency and Governance Bill (the "Bill") was published on 20 May 2020. The Bill introduces a new type of ‘moratorium’ whereby eligible companies can take 40 days to restructure without the threat of enforcement action from creditors.

Par décision du 5 mai 2020, un tribunal de district zurichois a approuvé la reprise de parties d'une entreprise d'une débitrice sous forme d'une transaction dite de « pre-pack » (préemballage), simultanément à l'octroi d'un sursis provisoire. L'outil du « pre-pack », dans lequel la vente des actifs du débiteur est préparée par avance, en vue d'une procédure ultérieure de sursis concordataire, est encore peu utilisé en Suisse.

It has long been the law that termination of contracts is permissible under the Companies' Creditors Arrangement Act (CCAA) and Bankruptcy and Insolvency Act (BIA) with the effect of the termination being to create an unsecured claim for damages in place of the contract. What has not been permitted is allowing insolvent companies to pick and choose parts of an agreement to terminate. Following a recent decision arising out of receivership proceedings in the Yukon, it may now in some circumstances be possible to terminate parts of an agreement.

Introduction

Adjudication is a quick and comparatively cheap method of dispute resolution and for those reasons is attractive to insolvent companies seeking to recover debts. However, a respondent was likely to be able to restrain the insolvent company from referring the matter to adjudication on the basis that it would be futile to do so, since any positive decision was unlikely to be enforced as a result of the very fact of the company’s insolvency. Therefore, any award lacked practical utility. Following the decision of the Supreme Court in Bresco v Lonsdale, that is no longer the case.