The current legislation, particularly the Coronavirus (Scotland) Act 2020; Coronavirus (No 2) (Scotland) Act 2020 and the Corporate Insolvency and Governance Act 2020, contain measures to protect debtors affected by Covid-19.

These measures restrict the options available to landlords and creditors and have been extended to remain in force until 30 September 2021, although some measures will cease on 30 June pending subject to any further extension which may be granted.

Commercial Leases

Irritancy

In distressed situations, commercial negotiations will often go down to the wire. Whilst proposals for restructurings may be approved in principle among stakeholders, their implementation may rely to a greater or lesser degree on future agreement among the relevant parties. The recent decision of Mr Justice Trower in Re Smile Telecoms Holdings Ltd provides guidance on how those factors weigh on the sanction of Restructuring Plans in the UK’s new insolvency regime.

Although the UK left the EU on 31 January 2020, the impact of Brexit on cross-border insolvencies was largely postponed until the end of the transition period at 11pm on 31 December 2020.

The UK is now designated as a "third country" from the perspective of the EU, directly applicable EU laws and regulations no longer apply, and the Brexit Trade and Cooperation Agreement does not deal with cross-border insolvencies. As such, insolvency practitioners may now be left feeling that they are effectively in a "no-deal" scenario.

Background

The UK Restructuring Plan took its first foray down the well-trodden path of lease restructuring over the last week. The Restructuring Plan has been used through to court sanction in five cases so far: however, none has sought to compromise landlord claims, the preferred tool for which has until now been the CVA.

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.

In June 2020, the Corporate Insolvency and Governance Act (the “CIGA”) introduced a new procedure to the restructuring toolkit in England & Wales, the Part 26A restructuring plan (the “Plan”, see further detail on CIGA in our article here). The Plan is similar to the well-tested English law scheme of arrangement (the “Scheme”), and the English courts have so far relied on the wealth of Scheme case law to guide them in deciding whether to sanction a Plan.

The second webinar in our series brought together WFW Real Estate Partner , George Nicholas, Global Head of Hotels at Savills, Felicity Black-Roberts, VP Acquisitions and Development – Europe and North Africa at Hyatt and Yannis Ermilios, Managing Director – Portfolio Management at Colony Capital. The panel debated the potential for M&A in the hotel sector, as it lined up to be the fastest-recovering of the real estate segments.

The Corporate Insolvency and Governance Act 2020 introduced a number of temporary changes to UK insolvency laws last year. Those changes, together with other measures such as the moratorium on forfeiture proceedings have recently been extended, we assume, to avoid the perceived cliff edge of insolvencies that might follow if such measures are brought to an end abruptly.

The temporary restrictions on winding-up petitions brought in under the Corporate Insolvency and Governance Act 2020 (“CIGA”) are wider than originally envisaged when first announced by the government in April 2020 and have now been extended until 30 June 2021.

This note summarises the duties that directors of companies incorporated in England and Wales are subject to.

This note explains those duties, and matters that directors should consider in relation to them, in the context of the COVID-19 pandemic.