New legislation has come into effect which extends the applicability of certain temporary provisions under the Corporate Insolvency and Governance Act 2020 (“CIGA”). But what does this mean for businesses?
In several ways, businesses can continue to make use of the breathing space provisions brought in by CIGA to support their day-to-day work in keeping their companies afloat during the pandemic.
This round-up collates the information, analysis and guidance relating to insolvency issues shared by our Construction and Restructuring, Insolvency and Bankruptcy teams during the COVID-19 pandemic. For further information on any of the issues below, please get in touch with one of the Key Contacts.
The Corporate Insolvency and Governance Act 2020 (‘CIGA’) came into force in June 2020 and introduced significant reforms to the insolvency law of England and Wales. This article explores the temporary measures introduced by CIGA, with a particular focus on what they mean for creditors looking to recover bad debts and offers a possible solution for creditors with claims which, in current challenging times, may be written off as disproportionately costly to take forward.
Limited debt recovery options and enforcement rights until (at least) 31 December 2020
On 30 October 2020, the Insolvency Service published its quarterly insolvency statistics for July to September 2020 (Q3 20).
What do the stats say?
On 8 October, the Government announced that it will bring forward new regulations requiring mandatory independent scrutiny of pre-pack administration sales where connected parties, including the former company’s existing directors or shareholders, are involved in the purchase.
Challenging a Tenant CVA
Company Voluntary Agreements ("CVAs") have been the go-to option for struggling retail businesses over the pandemic period. While all creditors are generally treated equally under a CVA, landlords are increasingly finding themselves at the short end where they are the only, or one of, a very small pool of, creditors taking a hit. It is now more important than ever that a landlord knows the circumstances by which they can challenge a tenant's CVA.
This summer’s landmark Supreme Court decision in Michael J Lonsdale (Electrical) Ltd v Bresco Electrical Services Ltd (in Liquidation) [2020] UKSC 25 (“Bresco”) would have doubtless been interesting news for Insolvency Practitioners (“IPs”) engaged in the construction sector.
The damage that the COVID pandemic has done to the food and beverage sector has been widely reported. Plenty of well-known and well-loved restaurants and pubs have entered into an insolvency process or formally restructured their debts in an effort to survive.
As England enters its second period of lockdown, commercial landlords are reminded that the temporary measures put in place by the UK Government earlier this year, protecting commercial tenants from eviction and the operation of CRAR and restrictions on the use of certain insolvency processes, are set to continue during the second lockdown and beyond.
The measures are intended to protect business tenants that are unable to pay their rent as a result of the COVID-19 pandemic.
The key measures