Lawyers have called for a break on winding-up petitions against retailers as they fail to pay creditors due to the outbreak. So far, retailers have been hit with 52 winding-up petitions since the beginning of the year, with the numbers accelerating since the coronavirus outbreak took hold, according to lawyers at RPC.

Such a move would give retailers breathing space as they try to mitigate the impact of coronavirus, but it would also hurt creditors including small suppliers.

Download this guide for commercial landlords from our property and insolvency team. This handy table sets out the enforcement options potentially available following the government’s emergency measures to combat COVID-19 whether or not the defaulting tenant has entered a formal UK insolvency procedure.

Landlord’s remedies on default by an insolvent commercial tenant

The High Court has delivered the first decision on the Coronavirus Job Retention Scheme (the “Scheme”), in the context of the Carluccio’s administration.

As we have previously discussed (HERE), despite further clarification from HMRC over recent days, there remain some unanswered questions regarding the detailed operation of the Scheme, given that the Scheme’s exact legal framework has not been published.

CORONAVIRUS RESPONSE – INTRODUCING FLEXIBILITY TO DIRECTORS' DUTIES?

IN LIGHT OF COVID-19, THE UK GOVERNMENT RECENTLY ANNOUNCED ITS INTENTION TO TEMPORARILY SUSPEND THE OFFENCE OF WRONGFUL TRADING BY DIRECTORS OF UK COMPANIES. THIS WILL INEVITABLY HAVE A WIDE-RANGING EFFECT ON BOTH DIRECTORS AND CREDITORS.

It is now common knowledge that the Government has responded to the COVID-19 crisis with a number of protective measures, including the Coronavirus Job Retention Scheme (CJRS), which provides support to businesses that cannot maintain their current workforce because their operations have been severely affected by COVID-19. Under the CJRS, employers can apply for a grant to cover 80% of the wages (up to £2,500 per month) of employees who are placed on furlough leave.

Background

In the 2018 Autumn Budget, the Chancellor announced his intention to reintroduce Crown Preference with effect from 6 April 2020. Due to the attempts to prorogue Parliament and the General Election last year, the necessary legislation was not passed. However, it has now been introduced in the Finance Bill 2020, with the later start date of 1 December 2020.

A court¹ has approached the interplay between the Insolvency Act 1986 and the Government's furlough scheme so as to encourage and support the rescue culture and facilitate access to the scheme by administrators. It ruled that:

A Sheriff at Glasgow Sheriff Court has recently published a judgment showing its approach regarding the role played by a court reporter in an application by a liquidator to seek approval of remuneration.

The note concerned the case of One Optical Limited (in liquidation) (the Company).

This judgment is useful for insolvency practitioners in setting out how a court (in this case Glasgow Sheriff Court) views the role of a court reporter when approving (or otherwise) the remuneration of a liquidator.

Legal opinions can be complex, and certain areas require the provision of reasoning to support the opining firm’s conclusion. Parties should discuss and agree the scope of legal opinions as early as possible within the life cycle of a deal. This article discusses some common areas for consideration.

WHAT IS A LEGAL OPINION AND WHY IS IT USED?

Legal opinions are formal letters typically provided to confirm a specified legal position in relation to a document or a suite of transaction documents.

For example, a firm practising English law may be asked to opine on whether:

When a company director fails to carry out their legal responsibilities, they run the risk of being disqualified. This can be a lengthy procedure resulting in a period of disqualification during which it is not permitted to form, promote or manage a company.

The main law governing disqualification is contained in the Company Director Disqualification Act 1986.

Grounds for disqualification as a company director