Restructuring Foreign Companies in England Using a Restructuring Plan

A restructuring plan may well be a very effective way of restructuring a foreign company. It has several advantages over a scheme of arrangement and with a relatively low entry threshold, the English court has already sanctioned at least one plan for a foreign company in the relatively short time that it has been available. Introduced in 2020, the English restructuring plan offers foreign companies looking to restructure, flexibility and options that might not be available in their local jurisdiction.

We have produced an alert, explaining when a foreign company can use the English process to restructure, the advantages of a restructuring plan and examples illustrating when foreign companies have successfully restructured in England.

How Does the New UK Code Of Practice Assist Landords and Tenants in Rent Negotiations?

By Stephanie Hadley, Michelle Adams and David Holland on November 29, 2021 Posted in UK

Further to our previous blog outlining the new rules about payment and collection of unpaid commercial rent, our first alert looks at the new Code of Practice in detail.

This answers questions relevant to both commercial landlords and tenants who have yet to start or are in the process of negotiating payment of rent arrears that accrued during the COVID pandemic. The alert can be accessed here and will be followed up shortly with a review of the proposed new rent arbitration scheme legislation.

Supply Chain Risk and Increasing Costs: How Are UK Businesses Building Resilience?

By Simon Garbett on November 25, 2021 Posted in EU, UK

Supply chain issues are not new, but following the lifting of coronavirus restrictions in the UK and the hope that UK businesses will bounce back from a prolonged period of suppressed (or no) trading, they are having an acute impact on recovery.

Disruption, delay and increased costs were compounded by the pandemic. But these issues have arguably been brought into even sharper focus now that business has re-opened and the true impact of the UK leaving the EU is being felt. Indeed, supply chain challenges are at the very top of many C-suite agendas right now, having recently caused some very high profile operational disruptions and lost sales for a good number of household name brands: such as McDonald’s, IKEA, Nandos and JD Wetherspoons to name but a few.

An Introduction to France’s New Restructuring Laws

By Laure Perrin and Nargiza Yussupova on November 24, 2021 Posted in EU, UK

In the context of the EU Directive 2019/1023/UE of 20 June 2019 (“Directive”) and in the aftermath of the Covid crisis, France has reformed its insolvency legislation. The purpose of the legislation is both to implement the requirements of the Directive into the French legislation, but also to tackle the consequences of the Covid crisis and endorse some of the measures that have been taken in this respect and have brought the number of insolvency proceedings to a historic low, as well as other measures.

Shining a light (Bulb) on energy supply company failure, SoLRs and special administration

By Emily Davis on November 23, 2021 Posted in UK

As has been widely reported, the recent energy price volatility (coupled with the price cap limiting suppliers’ ability to pass increased costs on to consumers) has caused a number of energy supply company failures. Yesterday saw the announcement of the collapse of Bulb, one of the UK’s largest energy suppliers, with it being due to be placed into special administration very shortly.

This is the first energy special administration we’ve seen. So how are the insolvency rules different for energy companies? What is a special administration, and why is this the first one? Continue Reading

Directors of Dissolved Companies and COVID Fraud

By Laura Will on November 18, 2021 Posted in UK

On 12 May 2021, The Rating (Coronavirus) and Director Disqualification (Dissolved Companies) Bill was introduced to Parliament.

The Bill passed through the Commons stages unaltered and recently passed the Committee stage at the House of Lords on 10 November 2021. The Report stage will be taking place on 1 December 2021.

New UK Rules Governing Unpaid Commercial Rent

By Rachael Markham on November 11, 2021 Posted in UK

Landlords and tenants have both had their own struggles with paying or recovering rent during the COVID-19 pandemic.

Rent arrears accrued during 2020 as sectors, such as retail and hospitality, remained closed for a large part of the year and in an effort to support businesses get back on their feet, landlords were prohibited from forfeiting leases, petitioning to wind up their tenants or exercising CRAR rights.

Since restrictions have lifted, tenants must now pay rent as it falls due, and landlords can exercise all of their rights and remedies in respect of post-pandemic rents, but for accrued arrears there remains restrictions on landlords recovering that rent by forfeiture, CRAR or winding up petitions (unless the landlord is able to show that non-payment is non-COVID related).

The UK government announced earlier this year, that it proposed to introduce legislation setting out a binding arbitration process. The details of which were published yesterday. Alongside the Commercial Rent (Coronavirus) Bill and the explanatory notes, the Government has also issued a new Code of Practice.

Temporary insolvency practice direction provides certainty about administration appointments

By Elysia Watts and Rachael Markham on October 8, 2021 Posted in UK

Throughout the pandemic we have seen a succession of temporary practice directions, enabling practitioners to deal with the swearing of notices of intention (NOI) and notices of appointment (NOA) of administrators remotely, as well as answering a question which the judiciary had grappled with several times – when does a notice of intention or notice of appointment come into effect if filed outside of court hours?

The new temporary practice direction (TIPD) that came into force on 1 October largely replicates it predecessors, but unlike its predecessors that were in place for a finite period, it appears that the new temporary practice direction may be a permanent fixture – at least until the issues addressed in the TIPD are addressed by a substantive rule change (see the introduction to the TIPD).

This is welcome news for those who may have been concerned about a return to pre-COVID cases that had to address the issue of when an NOI and NOA takes effect and whether administrators had been validly appointed. Continue Reading

Bankruptcy Venue “Reform” – What Are The Odds This Time?

By Mark Salzberg and Kyle Arendsen on October 5, 2021 Posted in US

Here we go again – proposed bankruptcy venue legislation is back after previous “reform” efforts came up empty. For those seeking legislative action, what are the chances for venue reform now?

Venue for bankruptcy cases is governed by 28 U.S.C § 1408, which provides that corporations may file in the district (a) in which their “domicile, residence, principal place of business in the United States, or principal assets in the United States” have been located during a majority of the prior 180 days, or (b) in any district where an affiliate, general partner or partnership has filed. Because of the different bases for venue, a company may have multiple choices where to file its chapter 11 case. For instance, if the company is incorporated in Delaware, like many companies are, venue in Delaware is permitted even if the company is headquartered in another state and otherwise has no connection to or assets located in Delaware. Alternatively, if the company has an affiliated debtor incorporated or located in a state, the company can file in its affiliate’s venue, even if the affiliate is insignificant in size or importance. All of this optionality may lead to “forum shopping,” meaning a company is strategically able to choose where to file its bankruptcy case, based on factors such as favorable case law in the district, the particular judges (and at times the fact that there is only one judge) in the district or the procedures employed in the district for complex cases. These choices can in many cases be dictated by lenders, who view the judges or jurisprudence in those districts as more favorable to their positions. Oftentimes, these choices lead to filings in Delaware, the Southern Districts of New York and Texas, as well as the Eastern District of Virginia—jurisdictions which are favored by debtors and lenders—which has resulted in a concentration of bankruptcy filings, especially by large public companies, in those jurisdictions. Continue Reading

Nero CVA challenge – part two: the rejection of the challenge

By Laura Will on October 1, 2021 Posted in UK

Coffee in the spotlight In our earlier blog, we considered the application to strike out the challenge against the Caffè Nero company voluntary arrangement (“CVA”) (Nero Holdings Ltd v Young) and the rejection of Caffè Nero’s strike-out action by the Court.

In particular, the Nero case focuses on electronic voting (which is increasingly popular in the current climate) and the impact of last minute offers and modifications particularly where creditors may have already voted before the modification is proposed. The hearing has now taken place and the creditors’ CVA challenge was rejected.

This case provides useful clarification of electronic voting procedures and how to consider existing votes in light of proposed modifications. Continue Reading