The UK's latest quarterly company insolvency statistics, published on 29 October, suggest that the unexpectedly calm seas seen over the last 18 months (and maintained by unprecedented government economic support) may be starting to give way to stormier waters as corporate insolvencies begin to return to pre-pandemic levels.
Background
As widely blogged about, on 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force, introducing both far-reaching wholescale reforms to the UK’s restructuring toolbox as well as temporary measures dealing with COVID-19 impacts on companies. The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:
Are you prepared to take advantage if one of your competitors falls into difficult times or enters an insolvency process? Do you know your way around buying from a distressed seller? What are the things you need to know? How can you prepare? What will make your bid most attractive?
Recent high profile collapses such as HMV have highlighted the opportunities that can be found within the distressed space – if you are prepared and know how to act swiftly.
Summary
Pension scheme trustees will generally be concerned to try to ensure that the “safety net” provided by the Pension Protection Fund (PPF) remains potentially available for their scheme.
This briefing looks at the options available to directors in the winding up of a solvent company.
HM Treasury has published a consultation paper setting out tentative proposals for changes to resolution arrangements for investment banks.
A company went into administration and company voluntary arrangements were entered into to effect a rescue of viable parts of the group. As part of that process, a valuation of the liabilities of the companies as at 1 October 2001 was required. They included claims arising under section 75 of the Pensions Act 1995. However, those debts were not triggered until July 2004 and the scheme actuary for did not sign the section 75 certificates and apportion shares amongst the various companies until March 2006.
On 22 July 2022 and after the judge ordered a delay for more evidence, the English court sanctioned the restructuring plan proposed by Houst Limited (Houst). Houst is an SME that is concerned with the provision of property management services for short-term/holiday lets. Its business was badly affected by the Covid-19 pandemic, meaning it was both cash flow and balance sheet insolvent when proposing the plan.
The High Court has rejected a landlord's challenge to the Caffè Nero CVA, giving support to the ongoing usefulness of CVAs in high street restructurings. The case raised issues around the use of the electronic decision procedure set out in the Insolvency Rules for CVAs, nominee and director decision-making during the CVA process, CVA modifications and provision of information to CVA creditors.
Background