Smile Telecoms Holdings Limited (“Smile”), a Mauritian company, has recently had its second restructuring plan sanctioned by the High Court in England. The case contains some important markers for those involved in restructuring plans, particularly those plans which involve international elements or which seek to prevent out-of-the-money creditors from voting on the plan.

Background

CVAs are a useful tool in the restructuring tool kit, and may prove extremely helpful to retailers or hospitality companies as a means of supporting those businesses as they emerge from the pandemic. The flexibility of a CVA and the ability to shape the terms of a proposal to meet the specific needs of a business have seen an increasing number of consumer led businesses use CVAs, and they have become popular as a means to restructure businesses that have a significant lease portfolio.

Following the UK Government extending the restrictions on winding up petitions until 30 June 2021 it is useful to note two recent cases that have considered the coronavirus test that currently applies to winding up petitions.

The temporary restrictions that prohibit winding up proceedings where non-payment is COVID-19 related, and restrict petitions based on unsatisfied statutory demands, that would have come to an end on 31 December 2020 have been extended until 31 March 2021.

What are the restrictions?

Statutory demands

Creditors cannot rely upon an unpaid statutory demand as evidence of inability to pay debts in order to issue a winding-up petition against a company, effectively rendering the statutory demand void for that purpose.

On 25 June 2020 the Corporate Insolvency and Governance Act (the Act) received Royal Assent. The Act makes both temporary and permanent changes to the UK insolvency laws.

The ability of suppliers to terminate contracts when a customer becomes insolvent is to be curtailed by the Government under plans published in the Corporate Insolvency and Governance Bill (the “Bill”).

This quick guide summarises the duties that directors of companies incorporated in England and Wales are subject to, and how those duties change when the company is insolvent or at risk of being insolvent. It also provides an overview of the p

This quick guide summarises the duties that directors of companies incorporated in England and Wales are subject to, and how those duties change when the company is insolvent or at risk of being insolvent. It also provides an overview of the personal risk to directors when the company is in financial difficulty.

Following on from our blog: Does e-filing give you a headache? Does the recent guidance issued by the Chancellor help ease the pain?

Today the Government published draft provisions for inclusion in the Finance Bill which will amend the Insolvency Act 1986 and grant HMRC preferential status on insolvency. A status that was removed in 2003 but which will be re-instated (in part) from 6 April 2020.

Despite huge concern from the lending market, voiced in responses to the Government’s consultation on this measure, the only material change we can see is confirmation that preferential status will not apply to insolvency proceedings commenced before 6 April 2020.

The benefit of hindsight is a wonderful thing. The benefits of a fully functional crystal ball to see the future would be much better. All pensions lawyers (and scheme actuaries) would add it to their gift list!

I will attempt to take a look at the pensions related announcements in Monday’s budget from a future (perhaps optimistic) vantage point.

So here we are, nearing the end of 2023…

1. Dashboards