The High Court refused to sanction the restructuring plan put forward by Nasmyth Group Limited (Nasmyth) pursuant to Part 26A of the Companies Act 2006 on 28 April 2023, despite both statutory conditions for cross-class cram down having been met.

Meanwhile, judgment is awaited in respect of the restructuring plan put forward by The Great Annual Savings Company Limited (GAS), which was proceeding simultaneously to Nasmyth and which also seeks to cram down HMRC.

There are a number of options and avenues that a company can explore when faced with business stress or distress. Depending on the circumstances, a combination of these could be appropriate to help mitigate or avoid a business failing.

This guide provides an overview of potential options and should be considered alongside specific advice from the company's advisors.

Informal Options

Even when informal options are being considered, directors should engage with their advisors and stakeholders to ensure that their decisions take into account their directors' duties.

With insolvencies expected to increase in the UK’s construction industry this year, as higher interest rates, inflation and an anticipated domestic recession dampen demand for housing and new commercial projects, we are often asked what protections an Employer can put in place in their contract to assist in the event of their contractor going into insolvency.

These issues should be considered at the time of entering into contracts and we have set out below some useful provisions which may assist should an insolvency occur during a project. These are:

As the economic headwinds indicate that borrowers will continue to face financial pressures in 2023 and beyond, lenders are seeking ways to exercise more leverage as “covenant-lite” facilities prevail. Material adverse change clauses in finance documents UK and US perspective By Olga Galazoula, Jacques McChesney and Charlotte Harvey 4 FUNDS INSIDER FUNDS INSIDER 5 The event relied upon by the lender to enforce this clause was the making of an arbitration award that could potentially result in significant damages being awarded against the borrower.

The sudden and spectacular failure of three regional banks within a week has pushed all other business stories off the front pages and has financial markets anxiously asking where the fallout stops. As unique as the underlying causes of each failure were, at their core these were all good old-fashioned bank runs triggered by liquidity issues.

For at least the past decade, federal bankruptcy courts have routinely prohibited cannabis businesses from seeking protection under federal bankruptcy law, regardless of whether a cannabis business is legally operating under state law.

Mark Fine, Aymen Mahmoud and Sunay Radia, McDermott Will & Emery

This is an extract from the 2023 edition of GRR's Europe, Middle East and Africa Restructuring Review. The whole publication is available here.

Our last newsletter commented on high inflation, dwindling business confidence and international supply chain issues. Those factors continue to influence the economic outlook, with some businesses unable to survive the strengthening head winds impacting the economy. The consumer price index increased 7.2 percent in the 12 months to December 2022, remaining stubbornly high despite significant movements in the official cash rate to 4.5%, up significantly from the 0.25% it was sitting at in October 2021. ANZ's economic forecast warns that a "policy induced recession is looming".

A large number of UK companies are in significant financial distress at the moment.

Following the collapse of Silicon Valley Bank (SVB), there are many questions being asked across the financial and tech space: what caused the bank to collapse? Could it have been prevented? What could the bank itself and indeed its 40,000 customers - mostly in tech – done differently to mitigate risk and minimise impact.

Given SVB’s involvement in funding many fledgling tech start-ups and scale-ups, we look into what the Bank’s failure could have spelled for the viability of these businesses, and indeed the customers they supply into.