The troubles possibly faced by WeWork, the shared office space company, were well documented long before the global impact of COVID-19 was felt. WeWork, unlike other shared office companies, tends to use a more inherently risky business model, taking long leases and carving them up into short-term flexible letting arrangements. Whilst some shared office companies take on geared leases, passing up a percentage of revenue, and thus sharing the risk and reward, WeWork are understood to have a larger holding of fixed rent leases.

In the first litigation involving the Furlough scheme, the court in Re Carluccio's (in administration) ruled on how the administrators can lawfully give effect to furlough arrangements with the employees who have agreed to the variation of their employment contract.

Read on for our analysis of the case which gives an interesting insight into how the courts in the future might interpret the furlough scheme.

1. Background

Carluccio’s in administration

The latest news and developments in retail mortgage lending and regulation.

This month in summary:

News

Government updates on the pandemic

There have been a number of updates that will affect lenders in respect of the pandemic. The key stories are:

Status Of Crypto-Assets Under English Law

The definition of ‘property’ in section 436 of the Insolvency Act 1986 is considered by many to be wide enough to be inclusive of crypto-assets, and recent developments in this jurisdiction also support the position that crypto-assets constitute property under English law.

As previously reported, the UK Government has announced that it will urgently bring forward proposed reforms to the corporate insolvency regime, to give "breathing space" to companies in financial difficulty as a result of Covid-19. The proposed reforms, based on a consultation in 2018, include new restructuring and temporary moratorium procedures.

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.

This note sets out the top ten issues for boards of companies and businesses facing the challenge of the Covid-19 crisis. Companies may have other considerations but we hope that these will go some way towards addressing the key points to bear in mind in this crisis. As such, they represent a snapshot of the current state of the law and will need to be checked to reflect any changes that may come into effect.

Statutory duties

The new Temporary Insolvency Practice Direction gives much-needed clarity for insolvency proceedings in the Business and Property Courts during the COVID-19 pandemic.

General provisions

The outbreak of the novel coronavirus pandemic (COVID-19 or Coronavirus) has had and will continue to have wide-ranging implications for businesses, governments and institutions across markets and industries. Shearman & Sterling (Shearman) has created a dedicated resource hub containing information on the potential impact this pandemic may have on businesses, and what businesses can do to prepare and succeed in this rapidly evolving space going forward. The sections that follow cover select key topics that may be of particular interest at the time of writing.

The High Court has ruled that directors breached their duties by taking up the company’s business opportunity for their own benefit, even if the company was unable to take up that opportunity by reason of its financial position: Davies v Ford & Ors [2020] EWHC 686.