On 12 May 2021, the High Court sanctioned Virgin Active’s Part 26A restructuring plan which had been heavily contested by certain landlords. This is the third restructuring plan to use cross-class cramdown (first used in the DeepOcean Group and subsequently in Smile Telecoms), and the first to bind dissenting landlord classes to lease compromises.

In Uralkali v Rowley and another [2020] EWHC 3442 (Ch), the High Court confirmed that it is unlikely that an officeholder would be found to owe a duty of care to participants in a sale process out of an insolvent estate. This is an important decision which will give officeholder’s considerable comfort that operating an administration or liquidation sale in the ordinary course is unlikely to expose them to risk of liability to a bidder for the way the process is run.

As the business world starts to count the cost of the COVID-19 pandemic and the government measures taken to contain it, attention is turning to the tools available to help companies that have been financially impacted.

Many companies are deferring payments to conserve liquidity, raising difficult questions around directors’ duties and leading to an immediate focus on how to protect the business from resulting creditor action.

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance. In this briefing we consider the proposals and what it means for European insolvency and for the UK.

On 22 November 2016, the European Commission published a draft directive on insolvency, restructuring and second chance (the Proposals).

What are the Proposals? The Proposals have three main parts:

The Supreme Court’s decision in a dispute over a parent company guarantee will change the way insolvency practitioners deal with the distribution of assets when a corporate group collapses.

The recent descision of BNY v Eurosail1 is an important modern descision on the blance sheet test for insolvency.

In the construction industry, contractor insolvency delays projects, increases costs and may deprive the employer of remedies and third parties of meaningful warranty protection. In 2008, it was reported that the number of construction firms facing grave financial concerns was 547 per cent higher than in 2007 (Building, 14 November 2008). As contractor insolvencies are likely to increase in 2009, how can an employer protect its position at the start of a project and when contractor insolvency occurs?  

Contractual safeguards  

The National Security and Investment Act 2021 (the Act) comes into force on 4 January 2022. The Act sets out the UK’s new national security screening regime. The Act replaces, and significantly extends, the UK government’s power to investigate and intervene in transactions which pose, or could pose, threats to the UK’s national security (see our earlier related blog post).

There has been much debate in recent years around the use made of certain UK restructuring tools – the company voluntary arrangement and, more recently, the new restructuring plan – to restructure commercial property leases. Commercial tenants argue that compromise is necessary to address high fixed costs that are no longer sustainable, but landlords have often been critical of the approach taken. This debate has become more acute in the context of the pandemic, as many High Street businesses subject to mandatory closure have built up significant rent arrears that need to be addressed.

On 20 January 2021, the UK High Court approved the convening of a single scheme meeting for certain aircraft lessors of MAB Leasing Limited (MABL) in relation its proposed UK scheme of arrangement. This is an important step towards the implementation of a wider restructuring for the Malaysia Airlines group, but may also have wider implications on the restructuring options available not only to airlines, but also to businesses with other leased assets, including real estate.

Lessors form a single class