The proposal to reinstate Crown preference in insolvency has met resistance from all angles; the insolvency profession, turnaround experts, accountants, lawyers and funders. But despite HMRC’s bold statement in its consultation paper that the re-introduction of Crown preference will have little impact on funders, it is clear following a discussion with lenders that it may … Continue Reading
The demise of high street retail and the insolvency of household names, including Woolworths, BHS, and more recently Debenhams and Monsoon has been a real headache for property owners. The moratorium created by administration ties the hands of landlords, preventing them from forfeiting leases without first having obtained the consent of the administrator or the … Continue Reading
In a series of articles prepared for our “Talk to the International Experts” program we take a look at “Undoing Business in the UK” highlighting the options available to corporates wishing to restructure, wind up or close their UK business. Click here to read our guide.… Continue Reading
It was a painful outcome for the administrator of ARY Digital UK Limited (“ARY”) when he was found in breach of duty and liable to pay £743,750. The case of Brewer and another (as joint liquidators of ARY Digital UK Ltd) v Iqbal [2019] EWHC 182 (Ch) reminds office holders of the importance of understanding … Continue Reading
Crown prerogative dates back to the Magna Carta entitling the monarch to absolute priority for revenue related debt. Come 6 April 2020 will we really be heading back to feudal times and 1215? The proposal to reinstate Crown preference was announced as part of the Autumn Budget last year and came as a surprise to … Continue Reading
There has always been a tension between protecting the interests of defined benefit pension schemes and insolvency given on the one hand The Pensions Regulator (TPR) seeks to protect the interests of pension scheme members and the Pension Protection Fund and on the other, the insolvency regime seeks to protect the interests of creditors as … Continue Reading
You may have noticed from the emails flooding into your inbox (even in this post-GDPR world) that this Friday 23 November is “Black Friday”. The event, originating in the US, takes place the day after Thanksgiving and is now synonymous with heavy discounting by retailers, especially those online. Less than a decade ago, this would … Continue Reading
No one knows for certain what the future will hold for the UK and the remaining EU countries post 29 March 2019 but in the context of cross-border insolvency we do know that if there is a no-deal Brexit, that the Recast Regulation on Insolvency Regulation (EU) 2015/848 will be repealed. So, what does this mean … Continue Reading
Paul Muscutt, London restructuring partner at law firm Squire Patton Boggs, talks to Andrew Tate, former R3 President, Chair of R3’s Policy Group and Partner at accountancy firm Kreston Reeves LLP, about conflicts of interest in the restructuring and insolvency profession*.… Continue Reading
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include: the ability for all companies to apply for a moratorium a new insolvency process – the “restructuring plan”, enabling companies to cram … Continue Reading
Cathryn Williams and Paul Muscutt, partners in the Squire Patton Boggs Restructuring & Insolvency team in London, interview Ian Fletcher, Director of Policy (Real Estate) of the BPF (the trade association for UK residential and commercial real estate companies) to get the BPF’s views on the recent spate of CVAs seeking to reduce/compromise lease liabilities.… Continue Reading
In the last week we have seen MPs criticise accountancy firms, KPMG, Deloitte, EY and PWC in their first report on the collapse of Carillion, describing the big four as “a cosy club” and calling for the firms to be forcibly broken up. Whilst not suggesting that the firms were to blame for the collapse, … Continue Reading
HM Revenue & Customs (“HMRC”) has issued a consultation entitled “Tax Abuse and Insolvency: A Discussion Document” on how it proposes to confront those who misuse insolvency law as a means of avoiding or evading their tax liabilities. HMRC often describes itself as an “involuntary creditor” because it does not choose to trade with debtors. … Continue Reading
An effective and well-equipped insolvency and restructuring regime gives confidence to investors and financiers, enabling credit to flow through to businesses and boost economic activity, growth and innovation. In 1999, following the Asian financial crisis, the World Bank carried out a review of the international regimes to establish a set of key principles for effective … Continue Reading
Carpetright, the UK flooring company, has announced that it is considering a Company Voluntary Arrangement with the aim of “rationalising the company’s property portfolio in order to improve the long-term prospects of the business”. This is expected to enable the business to close unprofitable shops and reduce their rent bill. With 409 shops across the … Continue Reading
Jamie Oliver’s two flagship restaurants have hit the headlines this week, with the upmarket steak restaurant Barbecoa in London’s Piccadilly closing. This comes shortly after last month’s announcement that Jamie’s Italian was closing 12 of its 37 restaurants, following the 6 sites that closed in January 2017. The Guardian reported that the number of UK … Continue Reading
Under German law, there are strict legal obligations for the managing directors of an insolvent company to file for insolvency. Failure to comply exposes a managing director to civil and criminal liability. It is therefore important for managing directors to know how to test whether their company is insolvent. One of the legal reasons for insolvency … Continue Reading
As of 1 January 2018, those who are obliged to file a petition for declaration of bankruptcy of a company will face stricter liability in Slovakia. This could result in them being required to pay a fine/damages and can even result in their disqualification from sitting on boards of Slovak companies. In addition to an obligation to pay a … Continue Reading
“There’s a magical place, we’re on our way there, with toys in their millions, all under one roof – it’s called… Toys R Us!” The lyrics resonate with millions worldwide. The advert is as iconic as Coca Cola’s “Holidays Are Coming” commercial or the Sainsbury’s “Christmas is for sharing” World War 1 cinematic ad. Sadly, … Continue Reading
Much has already been written about the proposal for the “Second Chance” directive (“Proposal“) published in November 2016 which is still being debated by the EU bodies – and rightly so. Harmonisation of insolvency law across the EU is needed as one in four insolvency proceedings is a cross-border insolvency and creditors need to know what to … Continue Reading
The English High Court has sanctioned a scheme of arrangement for Algeco Scotsman PIK SA, a Luxembourg-incorporated company, after the creditors consented to the New York governing law and jurisdiction clause being altered in favour of the jurisdiction of the English courts. The issues discussed were: the fair representation of a class of creditors; cross-jurisdictional schemes; and early tender fees offered … Continue Reading
Australia’s corporate insolvency regime has undergone significant reform with the passing of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 (the Bill) through both houses of parliament. One of the key elements of the reforms is the introduction of a “safe harbour” for company directors, operating as an exception to the civil … Continue Reading
The EU directive 2012/30/EU proposed in November 2016 (“Proposed Directive”) aims to avoid the adverse effects of insolvency on companies through a more flexible regime of restructuring.… Continue Reading
German insolvency laws are very strict. The management of an insolvent company is under strict obligations to file for insolvency, and failure to comply with such obligation may result in civil and criminal liability. Other stakeholders, like financing banks or suppliers, who are dealing with a distressed company, require documentation that their contract partner can … Continue Reading
