The High Court has sanctioned the restructuring plan of ED&F Holdings Ltd, providing further clarity on the exercise of its discretion to sanction a plan using cross-class cram down.
Background
At the convening hearing, the court ordered that five creditor and two member class meetings be held. All but one of the creditor classes approved the plan by large majorities.
Sanction hearing
In Re Edengate Homes (Butley Hall) Ltd (in liquidation) Lock v Stanley (in his capacity as liquidator) and another [2021] EWHC 2970 (Ch), the High Court has confirmed that to reverse a liquidator's assignment of claims to a third party, the claimant must satisfy a 'formidable' test.
Background
The UK government has lifted the current restrictions on statutory demands but imposed new temporary requirements for winding-up petitions presented from 1 October 2021 until 31 March 2022. The measures aim to protect companies from aggressive creditor enforcement as the economy opens up and other protections are lifted.
New requirements
From 1 July 2021, directors in the UK could be subject to a wrongful trading claim if their company goes into liquidation or administration.
Wrongful trading
This means that directors may be personally liable to contribute to the company’s assets:
In Nederland is het, vergeleken met omringende landen, vrij eenvoudig om beslag te leggen. De Wet herziening beslag- en executierecht (de ‘Wet’) beoogt het beslag- en executierecht voor schuldeisers eenvoudiger te maken door de mogelijkheden tot digitaal beslag leggen te verruimen. Ook wordt het beslag- en executierecht efficiënter met als gevolg dat schuldeisers minder kosten hoeven te maken om vorderingen te incasseren. Enig tegenwicht biedt de Wet, uitgebreider dan voorheen, door waarborging van het bestaansminimum van natuurlijke personen met schulden.
The most recent amendment to the Act on Commercial Companies and Cooperatives, effective since 1 January 2021, has brought several changes to the liability of managing directors (MDs), which we outline below.
Salary and benefits
The time period within which an MD is obliged to return any salary and benefits received from an insolvent company has been altered.
In a widely criticised move, the UK tax authority, HMRC, has become a second ranking preferential creditor regarding certain taxes in insolvency proceedings commenced on or after 1 December 2020.
This means that in the new insolvency waterfall, HMRC ranks behind the claims of holders of fixed charges and first ranking preferential creditors (most notably employees) but ahead of floating charge holders' claims and unsecured creditors.
The COVID-19 crisis has pushed intellectual property holders and implementers into a distressed situation. In this webinar, we explore what happens if a party to an IP licence becomes insolvent, and discuss practical tips for the non-insolvent party to protect its position.
What is CBILS?
CBILS is a government backed loan scheme to provide financial support to small and medium businesses (SMEs) across the UK that are experiencing financial difficulties as a result of the COVID-19 outbreak. The scheme opened on 23 March 2020 and will run for an initial period of 6 months.
The scheme is delivered by accredited commercial lenders, backed by the government-owned British Business Bank (the BBB).
Background
High-profile use of company voluntary arrangements or CVAs, has led to widespread media coverage and controversies. Household names such as Jamie's Italian, Prezzo, Toys R Us, Mothercare, Gourmet Burger Kitchen and more recently Debenhams are amongst the growing list of companies who have followed this well-trodden path, with varying degrees of success. Those companies unable to turn their fortunes around face administration or liquidation.