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
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
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
‘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
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
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
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
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
It is difficult to predict what 2023 might hold for businesses in the UK. Given the difficult economic environment, many will already be facing a challenging start to the year. Although the challenges of the pandemic (such as lock downs) have gone, others have materialised. Energy price hikes and inflation rises continue to make trading conditions tough. At some point in 2023 affected businesses may have to restructure, and others may need to enter a formal process. … Continue Reading
The requirement for overseas entities to register or be registered on the UK Register of Overseas Entities (ROE) at Companies House could impact certain transactions that insolvency practitioners (IPs) and lenders are involved with. Our latest quick guide highlights some of those areas and flags points for IPs and lenders to consider when dealing with … Continue Reading
Can a Company Voluntary Arrangement (“CVA”) complete, but still remain in place and bind creditors? The simple answer is yes; but it does require (a) the terms of the CVA to be carefully drafted to allow notice of completion to be filed before the end of the CVA term; (b) compliance with the terms of … Continue Reading
Supply chain disruption was exacerbated by the pandemic, and due to the ongoing conflict in Ukraine problems continue to impact UK businesses. Unfortunately there is no sign of disruptions abating in the short term. In a recent webinar Sarah Rathke explored the question: “Why is Everything Broken? Understanding Pandemic Supply Chains” which is available to view … Continue Reading
Following a long wait of 18 months, the Supreme Court has today confirmed that the appeal of the decision in BTI –v- Sequana is unanimously dismissed. The key question that many of us have been waiting for the answer to is: Does the creditor duty set out in s172(3) of the Companies Act 2006 exist … Continue Reading
Following the UK government announcing that UK businesses will benefit from a reduction in energy costs to help combat rising energy costs, details of the proposed scheme have now been released. Under the scheme, a discount will be automatically applied to the bills of those businesses that are eligible to receive it, namely businesses that … Continue Reading
Last week, the new Prime Minster announced a 6 month scheme to help businesses with rising energy costs. Although further details are awaited, the scheme is likely to reflect the support being provided to consumers, by offering a guarantee that discounts the unit costs for gas and electricity. Recognising that businesses have not benefitted from … Continue Reading
HMRC as the UK tax authority is often the largest creditor in any insolvency, but has not always been willing to engage in the process. This has caused viable restructuring proposals to fail for lack of support and this sometimes results in HMRC not achieving the best return. HMRC recognise that this stance has frustrated … Continue Reading
There has been very little to indicate how HM Revenue and Customs (“HMRC”) might approach a restructuring plan (RP), following HMRC’s preferential status being restored in 2020. The reinstatement of HMRC as a preferential creditor potentially makes company voluntary arrangements non-viable if HMRC do not support, but what about RPs? RPs introduced for the first … Continue Reading
In PGD (in liquidation) Manolete Partners plc v Hope Mr Justice Zacaroli considered whether it was possible and/or appropriate to limit the quantum of relief granted in insolvency litigation to the amount required to pay the liquidation debts, costs and expenses where the claim had been assigned to a third-party litigation funder. Zacaroli J held … Continue Reading
Although there have not been many moratoriums since they were introduced, there have been a few, and according to data collected for this recent interim report, the costs of appointing a monitor and entering into a moratorium appear to be fairly reasonable. This will provide comfort to both corporates and practitioners who (understandably) might be … Continue Reading
The perceived costs of proposing a restructuring plan are seen to be the biggest inhibitors to using the process for SMEs. It is still a relatively new tool and insolvency practitioners, lawyers and the courts are still grappling with it, but as we have seen recently in Amigo Loans it can provide creative and innovative … Continue Reading
It is often the case, that insolvency claims are pursued against former directors of the insolvent company or persons connected to them. It is also often the case, that such claims are assigned to a litigation funding company given lack of funds in the insolvent estate to pursue them. This is what happened in Lock … Continue Reading
The impact of Russia Sanctions has, as we have seen in the US with the first Chapter 11 filing (see our previous blog) started to have an adverse impact on businesses that have connections with Russia. The impact on supply chains, and the consequences for business remain at the forefront of discussions and in our … Continue Reading
