As part of its pandemic-driven £1.2 billion solvent recapitalisation, Virgin Atlantic recently became the first company to use the UK government's new restructuring plan introduced in June 2020.
Let's look at why the court approved Virgin's restructuring plan, and what companies intending to use the new plan need to know before moving forward.
Licensors of intellectual property rights may soon be unable to terminate licences where the licensee has gone into an insolvency process.
What are ipso facto clauses and why do they matter?
The draft Lex Covid, which amends insolvency and enforcement laws and draft law on certain measures related to repayment of loans in relation to the COVID-19 pandemic, has been approved by the Czech Parliament and must now be counter-signed by the President.
The insolvency law-related measures include:
Debtor's delay in payments
In the world of international trade, insolvency with cross-border elements is inevitable. Unlike many jurisdictions, there is no statutory mechanism in Hong Kong to deal with cross-border insolvency, and the Court's recent conflicting decisions added greater confusion as to Hong Kong's approach.
The UK’s corporate governance regime has been stress-tested in the past decade and in many respects it has done well. However, in response to certain high profile corporate collapses which have caused heavy losses for creditors, in particular individuals and suppliers with little opportunity to protect themselves against losses, and in the spirit of continual improvement, the government has recently launched its “Insolvency and Corporate Governance Consultation”.
The consultation indicates that the government is considering changes in the law to address:
Key points
Failure to comply with sections 333 and 363 of the Insolvency Act constitutes contempt of court for which a committal order may be obtained.
A trustee in bankruptcy should not usually require permission to apply for a committal order.
Correct procedure for application confirmed by the court.
Caveat Creditor…
Following a lengthy consultation period, the Ministry of Justice has now published the new Pre-Action Protocol for Debt Claims (‘the Protocol’). This will be of general interest to everyone, but perhaps particularly to landlords with individual tenants.
The Insolvency Service's report on the impact of CVAs on commercial landlords, particularly in the retail and casual dining sector, follows concerns from landlords that compromises are unfairly affecting them. The research was based on 59 CVA proposals.
Key findings
Objective
The new preventive restructuring procedure aims to deal with companies in financial difficulty before serious problems arise. The measures focus on preventing the insolvency of businesses to preserve their viability.
Main characteristics
In a recent judgment on directors’ liability, the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) held that startup companies are not deemed to be overindebted if they are receiving adequate finance from their shareholders or third parties.
Background