In a case that is sure to keep lawyers talking for months, the Supreme Court has decided the important case of Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd.
The case concerns the relationship between the statutory adjudication and insolvency set-off regimes.
The initial wave of post-COVID Chapter 11 business bankruptcies has revealed an increasing tendency for senior executives of financially distressed companies to award themselves substantial bonuses and similar forms of compensation immediately before placing their companies into bankruptcy. If this trend continues, it may largely nullify the efforts of Congress and the courts to rein in and strictly regulate such forms of compensation.
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.
Section 82 of the Coronavirus Act 2020 prevents landlords from forfeiting ‘relevant business tenancies’ until 30 June, and possibly longer. Regulations have also been made restricting the use of commercial rent arrears recovery (CRAR) during the same period, and emergency legislation is promised preventing landlords from serving statutory demands and instituting insolvency proceedings. But tenants should think twice before withholding rent and other lease payments, and landlords do not necessarily have to take a passive role.
In einem Entscheid vom 5. Mai 2020 hat ein Zürcher Bezirksgericht gleichzeitig mit der Gewährung einer provisorischen Nachlassstundung die Übernahme einzelner Betriebsteile der Schuldnerin als sogenannte pre-pack Transaktion genehmigt. Das Instrument des "Pre-pack", bei dem ein Verkauf von schuldnerischen Vermögenswerten vor, aber im Hinblick auf ein nachfolgendes Nachlassverfahren vorbereitet wird, ist in der Schweiz noch wenig verbreitet.