On 12 May 2021, in the first opposed cross-class cram down case, the English High Court sanctioned Virgin Active's restructuring plans, the first to bind landlords to lease compromises.

The decision

While the opposing landlords challenged the valuation evidence advanced by the companies, they did not advance evidence of their own. The court accepted the companies' evidence that:

On 17 May 2021, in the third of a trio of landlord challenge cases, the English High Court revoked Regis UK Limited's company voluntary arrangement (CVA) on one ground of unfair prejudice, but ruled against landlords seeking repayment of fees against the nominees.

The facts

On 10 May 2021, the English High Court rejected landlords’ challenge to the company voluntary arrangement (CVA) of fashion retailer, New Look. The New Look decision was the first in a trio of highly significant judgments focused on a distressed tenant's ability to compromise landlord's claims (our coverage of the Virgin Active and Regis decisions is available below).

The challenge

The landlords' challenge focused on jurisdiction, unfair prejudice and material irregularity as a result of the following:

The Court (Mr Justice Miles) has refused to sanction a scheme of arrangement (the “Scheme”) between ALL Scheme Limited (the “Company”) and its creditors. The Company is an entity within the Amigo group of companies (the “Group”).

Almost everyone knows the tale of Kodak. After over 100 years of market dominance in film and camera production, it was forced into bankruptcy in 2012 after Kodak’s management failed to understand the threat of digital photography on their business.

A similar story befell Blockbuster. A market leader in the late 1990s, by 2010 its business was in tatters as Netflix and online streaming soared in popularity.

Earlier today, 26 May 2021, the final condition to the restructuring plan for the Norwegian Air Shuttle group was met, allowing the Examiner’s scheme to become effective: confirmation that the business has successfully raised 6bn NOK.

Restructuring & Insolvency analysis: The creditors of New Look Retailers Ltd (NLR) approved a company voluntary arrangement (CVA) that disproportionately impacted on a number of NLR’s landlords. The compromised landlords challenged the CVA on numerous grounds. In dismissing the application, Mr Justice Zacaroli held that the CVA was valid, notwithstanding that it sought to treat various creditors in different ways, and that challenges pursuant to section 6 of the Insolvency Act 1986 (IA 1986) failed.

From 30 April 2021, an administrator will be unable to complete a sale of a substantial part of a company's property to a connected person within the first eight weeks of the administration without either:

• The approval of creditors
• An independent written opinion (positive or negative)

This alert considers the impact of the new regulations in practice, which apply to both pre-packs and post-packs that take place within eight weeks of an administrator's appointment.

When is an evaluator's report required?

The High Court dismissed landlords’ challenges to the terms of New Look’s company voluntary arrangement (CVA) last week in a ruling that has sparked lively debate within both the landlord and restructuring sectors.

The landlords challenged the CVA by way of three main limbs:

This is the first of a regular insolvency insights bulletin from the insolvency specialists at Quadrant Chambers. It is a short at a glance guide to the latest insolvency legislation changes and key cases, all cases link to the relevant judgments.

Legislation