On Wednesday 24 March, the government confirmed that it will be extending the current temporary restrictions on statutory demands and winding-up petitions and the temporary suspension of directors’ liability for wrongful trading put in place under the Corporate Insolvency and Governance Act 2020, until 30 June 2021.

The extensions, set out in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021, laid before parliament on 24 March, will come into effect on 26 March 2021.

RESTRUCTURING FOCUS ON 2019

JANUARY 2019

RESTRUCTURING: FOCUS ON 2019

CONTENTS

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VIEW FROM THE TOP NEW MONEY CONSIDERATIONS SOMETHING FOR ALL INVESTORS? THE INTERCREDITOR MINEFIELD LESSONS FROM CLAIRE'S STORES GOVERNANCE THE SPECTRUM OF OPTIONS CHAPTER 11 FOR THE UK? BREXIT AND UK INSOLVENCY REFORM EU INSOLVENCY REFORM: A CHANGING LANDSCAPE INDEPENDENT RECOGNITION WEIL CONTACTS

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2 RESTRUCTURING: FOCUS ON 2019

VIEW FROM THE TOP

RESTRUCTURING: FOCUS ON 2019

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On 24 February, the Government published draft regulations that, if implemented, will impose new restrictions on pre-pack administration sales to connected parties. For all `substantial disposals' (which will include `pre-pack' sales) to connected parties, taking place within eight weeks of the administrators' appointment, the administrators will either need creditor consent or a report from an independent `evaluator'.

Context

Over the last two years, BEIS has issued a number of consultations either focussed on, or touching upon, corporate governance issues in insolvency or the broader insolvency framework.

On 28 January, the English High Court handed down the first ever judgment sanctioning a restructuring plan under Part 26A of the Companies Act 2006 (“CA 2006”) (“Plan”) invoking the new cross class cram down procedure introduced into UK law in June 2020.

2018 has been described as “the year of the CVA”, especially in the retail and casual dining sectors. Although company voluntary arrangements can be a useful tool to compromise portfolios of leasehold obligations, there are certain situations where a CVA may be unsuitable.

1. When a full operational and/or financial restructuring is required

On 9 December 2020, the UK government gave businesses muchneeded breathing space with an extension of insolvency measures. 

Business Finance and Restructuring What will 2018 hold? Horizon scanning for 2018 Legal Outlook Legislative changes Reform of English corporate insolvency framework The Insolvency Service has yet to react to responses to its consultation in mid-2016 on significant reforms designed to improve the restructuring tools available to companies.1 We had expected the government to push this forward in 2017, but the reforms appear to have stalled and the issue was sadly missing from the Queen’s Speech.

The Insolvency and Companies Court in London handed down judgment on Monday, 19 October 2020 rejecting a shareholder challenge to the 2017 restructuring of Paragon Offshore plc (in liquidation) (the "Company").

The judgment gives helpful guidance on the approach taken by insolvency courts to reviewing, rescinding or varying their orders under rule 12.59 of The Insolvency (England and Wales) Rules 2016.

Weil have acted for Mike Pink, Richard Heis and Ed Boyle of KPMG as special administrators of MFGUK in connection with a CVA proposal to its remaining ordinary creditors, which will facilitate the winding-up of the estate for the benefit of the creditors.