The Pensions Schemes Act received Royal Assent yesterday (11 February).

For those involved in restructuring it is important to be aware that the Act introduces new offences, carrying hefty fines and the possibility of imprisonment that apply to “any person”. Given the wide scope of the drafting the new offences could capture directors, insolvency practitioners, lenders and other professional advisors commonly involved in a restructuring whose only defence to such a claim is that they acted with “reasonable excuse” – a term not defined in the legislation.

The Finance Act 2020 received Royal Assent today (22 July), confirming the anticipated but opposed intention to restore HMRC as a secondary preferential creditor on insolvency.

From 1 December 2020 HMRC’s claim will sit ahead of floating charge holders and unsecured creditors reducing the monies available for distribution to both when a corporate files for insolvency.

The UK Government has published the Corporate Insolvency and Governance Bill (the Bill) that proposes to make both temporary and permanent changes to the UK insolvency laws

It is not entirely clear how the UK Coronavirus Job Retention Scheme operates in line with current UK insolvency legislation, although it is clear that administrators can use the scheme and furlough employees.

Directors' Duties and Related Matters, in the Context of COVID-19

25 March 2020

Scope And Purpose of This Note

This note summarises the duties that directors of companies incorporated in England and Wales are subject to.

This note explains those duties, and matters that directors should consider in relation to those duties, in the context of the developing coronavirus disease 2019 (COVID-19), commonly known as the "coronavirus" or simply, COVID-19, pandemic.

Since the news of Thomas Cook’s demise a lot of focus has been on its travel customers. But beyond repatriating stranded holiday makers, the impact of large scale insolvencies such as Thomas Cook, Carillion and British Steel can be far reaching.

Those relying on the likes of Thomas Cook for business may also face financial distress as the impact of its insolvency ripples down the supply chain. Potentially impacting suppliers of goods and services, those who relied on Thomas Cook’s business outside of the UK, employees and landlords.

Regulation 7(1) of TUPE usually makes a dismissal automatically unfair if it is for a reason connected with the business transfer. But what if the reason for the dismissal is actually good old personal dislike and the transfer is just the context in which it surfaced?

Cathryn Williams and Paul Muscutt, partners in the Squire Patton Boggs Restructuring & Insolvency team in London, interview Ian Fletcher, Director of Policy (Real Estate) of the BPF (the trade association for UK residential and commercial real estate companies) to get the BPF’s views on the recent spate of CVAs seeking to reduce/compromise lease liabilities.

Do you think the current use of CVAs is fair on landlords?

A great deal of insolvency litigation is funded by non-parties to a claim – for example, by a creditor or an “after the event” (ATE) insurer. Ordinarily such arrangements and their precise terms are confidential and are not required to be fully disclosed to a counterparty in litigation. In the recent case of Re Hellas Telecommunications (Luxembourg) [2017] EWHC 3465 (ch) (“Hellas”), the court considered the extent to which the underlying details of the litigation funders should be disclosed for the purposes of a security for costs application.

In a corporate world where the capital structures of companies are becoming increasingly complex, schemes of arrangements under the Companies Act 2006 have established themselves as the restructuring procedure of choice for many distressed companies. This popularity is evidenced by the fact that schemes of arrangement have been increasingly used by overseas companies wishing to restructure their debts under the flexibility offered by English law.