The three year review of CIGA (the Corporate Insolvency and Governance Act) published by the Insolvency Service suggests that we might see changes to the corporate moratorium process – will these address concerns about the process and encourage more insolvency practitioners to recommend its use? The moratorium aims to protect companies from enforcement action to … Continue Reading
It’s now level pegging for HMRC on cram down – twice it has been crammed down, and twice it has not. In the most recent restructuring plan proposed by Prezzo, the court sanctioned the company’s restructuring plan and crammed down HMRC as both preferential and unsecured creditor. Unlike Houst’s restructuring plan, where HMRC was also … Continue Reading
In its battle to control and reduce the rate of inflation, the Bank of England has increased interest rates for a 13th consecutive time. Already at its highest level for nearly 15 years, rising interest rates are continuing to apply pressure on finances both at home and in businesses. Despite the Bank’s efforts, although slightly … Continue Reading
In two recent blog posts we discussed the challenge made to the Company Voluntary Arrangement (CVA) of Mizen Build/Design Ltd (the “Company”) by Peabody Construction Limited (“Peabody”) and the finding of (i) a material irregularity based on failure to disclose information to creditors in the CVA proposal, and (ii) unfair prejudice based on vote swamping. … Continue Reading
The court has recently confirmed that it does have jurisdiction to grant administrators a conditional discharge of liability but decided not to do so in the case of Re Central Properties Holdings Ltd (in administration) [2023]. In this blog we consider why the court refused to make that order and whether there are any circumstances … Continue Reading
The uncertainty in markets continues as a result of a number of issues, including monetary policy, supply chain challenges, labour market constraints, increased creditor activities and a balance sheet reckoning post-COVID-19 where government support propped up unworthy businesses. That potentially debilitating economic cocktail is compounded by the fact that all entities have a debt ceiling, … Continue Reading
Companies entering external administration often have outstanding tax filings. The external controllers appointed conduct initial and ongoing reviews as to those filings. Then, in time, they either bring the filings up to date or engage the tax office in order to revisit historical filings. Aside from being legally required to address a company’s filings, external … Continue Reading
The recent case of Re Lloyds British Testing Ltd [2023] is a reminder not to forget that in the right circumstances a director’s occupational pension pot might be a valuable source of funds that an Insolvency Practitioner (IP) can access to recover an unpaid debt due from a former director. Background In this case, an … Continue Reading
What can we say about the outcome of the GAS (Great Annual Savings Company Limited) sanction hearing that hasn’t already been reported? It’s impossible not to comment on the fact that the plan was not sanctioned, and as a consequence of fierce opposition from HMRC that it avoided cram down. Nor that the court refused … Continue Reading
In a decision likely to be welcomed by both debtors and lenders, the High Court has held that a charge granted by Avanti Communications Limited (“Avanti”) was properly characterised as a fixed charge (rather than a floating charge) notwithstanding that the chargor retained an element of control over the charged assets. A key plank of … Continue Reading
The NSIA is aimed at safeguarding national security and only applies to certain transactions occurring within certain sectors where national security might be threatened. There are 17 sectors in total, including energy, transport, and communications. Depending on the transaction, the NSIA may require a purchaser to notify the Secretary of State of an acquisition to … Continue Reading
Yesterday saw the end of a three-day sanction hearing for the restructuring plan (the “Plan”) of the Great Annual Savings (GAS) company, with Justice Adam Johnson reserving his judgment and importantly, his decision on whether to exercise cross-class-cram-down to sanction the Plan for a later date. As we discussed in our recent blog, the Plan … Continue Reading
‘If, at first, you don’t succeed, then try and try again’ is a fitting description for HMRC’s recent approach to restructuring plans, with its opposition of plans proposed by The Great Annual Savings Company (GAS) and Nasmyth Group Limited (Naysmyth). The GAS sanction hearing (which is due to take place this week) will be the … Continue Reading
External administrators in Australia are faced with immediate challenges from the date of their appointment. Those challenges often come in the form of uncertainty around contractual positions, conflicting interests between key stakeholders and the administrators’ rights and obligations. Fortunately, the Insolvency Practice Schedule, which now forms a critical part of Australia’s Corporations Act, gives administrators … Continue Reading
In a previous blog about the case of Mizen we considered the case from the point of view of “guarantee stripping”, looking at how the CVA dealt with those claims. However, the CVA was challenged on a number of bases, including whether it was unfairly prejudicial as a consequence of “vote swamping”. In this blog, … Continue Reading
In January, we wrote about Highland Capital Management, L.P. and the reorganized debtor’s filing of a petition for a writ of certiorari, by which the reorganized debtor asked the Supreme Court to consider whether section 524(e) of the Bankruptcy Code prohibits non-debtor exculpations. Now for something completely different. Earlier this month, the Bankruptcy Court for the … Continue Reading
A company voluntary arrangement (CVA) is a tool which has been widely utilised by companies seeking to restructure and compromise liabilities. In recent years CVAs have been in the limelight because of attacks by landlords who feel that they have been unfairly prejudiced by the CVA terms. Largely, challenges such as those to the Regis … Continue Reading
Can a liquidator run an unjust enrichment claim to seek to recover PAYE and NIC liabilities from a company’s directors arising from the company’s use of a “disguised remuneration” employee benefit trust (“EBT”) scheme? Based on the findings of ICC Judge Barber in the case of Re Ethos Solutions Ltd, the answer is “no”.… Continue Reading
Where a commercial property is sold by a receiver or insolvency practitioner (IP), VAT must be charged on the sale if the owner had exercised and properly notified an option to tax (OTT) in respect of the property. The IP acting on behalf of the seller needs to establish whether an OTT has been made … Continue Reading
The new year has seen a rapid pace being set in terms of anticipated and actual legislative, regulatory and common law changes across Australia’s restructuring and insolvency regimes. In our latest insight we flag potential changes to not only the legislative regime but also the regulatory framework and consider the outlook for key stakeholders.… Continue Reading
Following the sanctioning of the Good Box restructuring plan (RP) it seems the answer is yes. This might sound surprising to those familiar with schemes of arrangement, because that outcome is at odds with the long-standing decision in Re Savoy Hotels. For those less familiar with schemes and scheme case law, the court declined to … Continue Reading
The challenges facing the care sector are not news to anyone. However, as we enter 2023, a sector which has historically operated on thin margins may be about to hit breaking point, with the number of insolvencies involving residential care businesses having increased by 59% in the last year alone. Is it possible to identify … Continue Reading
Businesses around the globe, including those situated in Germany, continue to face difficulties because of disruptions in their supply chain created, in particular, by COVID-19 and the war in Ukraine. To add to that, the new German Supply Act on Corporate Diligence Obligations in Supply Chains (the “Act”) is likely to place further pressure on … Continue Reading
On 7 December 2022, the European Commission unveiled a draft directive (2022/0408 (COD)) (the “Directive”) proposing to harmonise certain aspects of insolvency laws across the European Union[1]. This blog specifically discusses the impact of the draft Directive on French law. For a more detailed and general analysis of the draft Directive, see our alert. The … Continue Reading