The Government is in the process of pushing the Corporate Insolvency and Governance Bill through Parliament, with it anticipated to become law later in June. The Bill represents the biggest overhaul of the UK’s insolvency legislation for over 30 years.
As we see more businesses having to close doors or adapt to a new set of rules, we set out a summary of some of the issues we anticipate for those needing to shut down but preserve their businesses at least until the lockdown is over. We will produce a more detailed client alert as matters develop although one message is clear – employers, employees, suppliers and customers are facing unique challenges and the best way to survive is to identify the issue, understand the options, and engage with pragmatism.
Employees
In this blog, we highlight changes to law, practice and procedure that will or could impact the restructuring insolvency market this year – covering important changes that should be on your radar – as well as providing an update on those changes that were expected but which might be delayed beyond 2020.
Brexit – will it be business as usual for R&I practitioners?
This week sees the UK finally leave Europe.
The proposal to reinstate Crown preference in insolvency has met resistance from all angles; the insolvency profession, turnaround experts, accountants, lawyers and funders. But despite HMRC’s bold statement in its consultation paper that the re-introduction of Crown preference will have little impact on funders, it is clear following a discussion with lenders that it may well have a far wider impact on existing and new business, business rescue and the economy in general than HMRC believes.
À la recherche du temps perdu (suite) – qu’en dirait La Fontaine ?
Brexit insolvency issues for trustees of pension schemes with overseas sponsors
You might remember that before 2016, in the world before the EU referendum (which did exist!), it was effectively not possible for the insolvency of an overseas sponsor of a UK pension scheme to trigger entry into the PPF unless the overseas sponsor had a branch or office (an “establishment”) in the UK (for legal geeks you might remember this was the issue discussed in the Olympic Airlines case which was heard by the Supreme Court in 2015).
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include:
The new Insolvency Practice Direction 2016 has finally been given approval by the Lord Chancellor and came into force yesterday (25 April) bringing with it changes to reflect the new Insolvency Rules 2016 and recent changes to the CPR. The new practice direction replaces that of 2014 with immediate effect. Key changes include:
An effective and well-equipped insolvency and restructuring regime gives confidence to investors and financiers, enabling credit to flow through to businesses and boost economic activity, growth and innovation.
What is the GDPR?