As we enter the final quarter of what has been a tumultuous year, the UK restructuring market has been open as usual for companies and creditors seeking to use the flexible restructuring implementation process of a Part 26 “scheme of arrangement” or the latest and greatest restructuring process now found in Part 26A of the Companies Act, a “restructuring plan” (or “Super Scheme” as we like to dub it).
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the super scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
The Corporate Insolvency and Governance Act 2020 was passed on 25 June 2020. The legislation has been in contemplation for a number of years, and has implemented a significant reform to the UK's restructuring and insolvency framework. It has also implemented certain temporary measures that are designed to protect and support businesses, protect jobs and, in doing so, attempt to preserve the economy during the COVID-19 pandemic.
On Monday 14th September 2020, Mrs Justice Falk issued her reasoned judgment, in respect of the application by Codere Finance 2 (UK) Limited (the "Company") to convene a single class of its creditors to consider and vote on a proposed scheme of arrangement under Part 26 of the Companies Act 2006 ( the "Scheme").
In a hearing spanning three days, the High Court of England and Wales addressed multiple grounds of challenge from a dissenting noteholder but nonetheless granted the Company's request to convene a single meeting of its scheme creditors.
Background
On 12 August 2020, we wrote about three important judicial decisions of the courts in England and Singapore relating to the enforcement of arbitration agreements over claims arising under insolvency laws.
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the Super Scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
What have we been up to?
The days and nights may well be getting noticeably cooler, but as a team we remain very much at simmer point in terms of the demands of newlyacquired business support and insolvency work and staying on top of recent legislative changes.
Amongst this month's work highlights have been:
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the Super Scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
Suppliers can no longer rely on contractual terms entitling them to terminate a contract on the grounds of a corporate customer’s insolvency (ipso facto clauses) in most cases. This prohibition was introduced by the Corporate Insolvency and Governance Act which came into force on 26 June 2020 (the Act). This briefing looks at the changes suppliers may need to make to their contracts, as well as to their credit and enforcement strategies, in light of this prohibition.
What does the new law do?