In England, it is common and quite straightforward for companies and LLPs to grant all assets security by way of a debenture which includes a series of fixed charges over specified assets, an assignment of material leases, insurances and other contracts and a floating charge over assets which are not expressly subject to those fixed charges. That same approach does not work in Scotland, at least not without some adaptation.

As Covid-19 restrictions in the UK gradually come to an end, the need for distressed tenants to be able to reorganise their liabilities to efficiently deal with the pandemic’s impact upon their balance sheets is likely to result in a number looking to use restructuring plans and CVAs.

Thankfully, a trio of significant recent cases, New Look1, Virgin Active2 and Regis3, have provided helpful and timely guidance regarding the use of such processes.

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:

As the measures in the UK designed to protect businesses from insolvency draw to an end, what guidance can be taken from Australia where similar measures ended a few months ago?

Today (16 June 2021) the UK governmentannounced a further extension of some (but not all) of the temporary measures first introduced by the Corporate Governance and Insolvency Act 2020 (CIGA) in June last year.

The two most significant temporary measures for companies facing financial difficulties as a result of the COVID-19 pandemic were:

CVA challenges have been in the spotlight recently and the story continues with Nero Holdings Ltd v Young in which the court considered an application to strike out a CVA challenge claim. Although there is nothing ground-breaking in the court’s reasoning to dismiss the strike out/summary judgment application, its detailed reasoning will offer some helpful guidance and assistance to those involved in these applications.

When finances become distressed, creditors examine all avenues to recover their debt which can result in any intercreditor agreements being thrown into the spotlight. The recent judgment of Re Arboretum Devon is another helpful reminder to lenders entering into an intercreditor agreement (ICA) that these should be drafted with the worst-case scenario in mind and using the clearest language in order to avoid disputes arising at the time of enforcement.

The suspension of wrongful trading under the Corporate Governance and Insolvency Act 2020 was introduced to allow directors to trade during the pandemic without the unwanted distraction of potential liability. This article considers whether that objective is likely to be achieved in circumstances where there has been no modification to the common law rules governing duties owed to creditors, and in light of the Court’s power to award compensation in disqualification proceedings.

Introduction

Section 284 of the Insolvency Act 1986 (the “IA86”) deals with the restrictions on a bankrupt in dealing with their property in the period between the making (practically speaking, the presentation) of a bankruptcy application and the vesting of the estate in the trustee. This period is defined as the “Relevant Period”. If a bankruptcy order is made, any disposition of property in the Relevant Period is automatically void. Any person in receipt of disposed property is treated as holding it on trust for the benefit of the bankrupt’s estate.

The High Court recently considered whether a creditor can be a victim to, and obtain relief for, a transaction which is reversed before the claim is even brought and the creditor is put back to the position they were in before the transaction took place.

Timeline