April Fools: Winding Up Petitions Set to Increase, Is this a Wind Up?

From  today (1 April), creditors can present a winding up petition without (a) having to give 21 days to the debtor company to make proposals to pay, and (b) being owed a debt(s) of £10,000.   Given that all temporary restrictions and processes have now ended, the ‘gloves are off’ when it comes to debt collection.

Although presenting a winding up petition incurs a hefty court fee, the effect (or even threat) of a winding up petition can elicit a swift payment to avoid the consequences that an outstanding petition can present to a debtor company, including

  • reputational impact,
  • director duty concerns – wrongful trading/misfeasance,
  • the company’s lender freezing its bank account(s),
  • the risk of making payments that can be clawed back if the company is wound up; and
  • ultimately a winding up order.

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The Effect of Sanctions on Supply Contracts

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 latest Insight Dr. Christopher Eggers considers the effect of the conflict on German supply chain contracts, although many of the points he discusses are relevant more widely.

Sanctions Against Russia and Restrictions on Flow of Capital Lead to First Chapter 11 Filing in the United States and Will Likely Lead to More Filings

As the conflict in Ukraine enters its second month and the list of sanctions and restrictions imposed by the United States, the European Union and other countries increases to punish Russia, the effects of the sanctions will become more apparent and are expected to have profound and lasting effects on a large number of industries.  These sanctions and other restrictions on the flow of capital will also have a long-term impact on Russian investments all over the world, as sanctions are placed on a large number of Russian financial institutions, companies, as well as certain Russian citizens close to Putin’s regime.  The recent filing of the chapter 11 case of the New York-based company Buyk Corp. (Buyk) is a case on point.

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(UK) In What Circumstances Can Directors be Personally Liable for Company Taxes?

British cashA lot is said about directors’ duties – ensuring that they are complied with to avoid potential claims resulting in personal liability – and that remains the case. However, as officers of a limited liability company, directors should also be aware of the circumstances in which they could be personally liable for the company’s tax debts.

Our new quick guide sets out the main circumstances in which directors and other officers can be held to be personally liable for company tax.

What Are UK Finance Seeing in terms of Business Recovery and Lender Support?

In the final video, as part of our business recovery and resilience series, Aysha Fernandes (Commercial Finance Director at UK Finance), gives us some insight into what UK Finance expect to see during 2022 in terms of business recovery and lender support. To listen to Aysha’s answer click here.

All other videos in this series can be accessed via our previous blog post.

 

What is the Impact of Recent Policy Changes on a Lender’s Appetite to Lend and UK Business Recovery?

As part of our business recovery and resilience series, our fourth video from Aysha Fernandes (Commercial Finance Director at UK Finance), answers this question as well as commenting on what trends UK Finance have been seeing as we start to come through the pandemic.  To listen to Aysha’s answer click here.

Our previous video answering How should UK companies approach HMRC for support? can be accessed here, as well as our videos answering As we are coming out of the COVID crisis, what should directors be thinking about? and There hasn’t been a wave of insolvencies, is business stress still there or are we through the worst of it? which can be accessed through our previous blog.

Webinar Recording: The Conflict in Ukraine – Impact on Capitals, Markets and Boardrooms

On Tuesday, March 22, 2022, Squire Patton Boggs and the American Bankruptcy Institute hosted a webinar titled “The Conflict in Ukraine:  Impact on Capitals, Markets and Boardrooms.”  The webinar featured a distinguished panel of Squire Patton Boggs professionals, including former Speaker of the US House of Representatives John Boehner, Career Ambassador Frank Wisner, Ambassador Matthew Kirk, Patrick Brooks, José María Viñals, and Ludmilla Kasulke, and leading energy industry expert Kate Dourian, a non-resident fellow of the Arab Gulf States Institute. The panel was moderated by Stephen Lerner, Global Chair of Squire’s Restructuring & Insolvency Practice Group.

The discussion focused on the geo-political, legal and economic repercussions of the crisis in Ukraine.  Our panelists provided timely and insightful commentary and advice on:

  • the current situation on the ground in Ukraine;
  • the impact on NATO and potential membership for Ukraine;
  • the impact on US relations with China;
  • how the Ukraine conflict differs from previous recent military conflicts;
  • the current sanctions landscape and how to navigate the various sanctions imposed by the US, UK and EU;
  • the global economic impact;
  • how C-Suite executives and directors are addressing the myriad business issues and challenges caused by the conflict; and
  • the impact on the ability of non-Russian investors and creditors to recover on debt and equity investments in Russian companies.

A recording of this webinar is available.

Business Recovery: How Should UK Companies Approach HMRC for Support?

HMRC form with moneyAs part of our business recovery and resilience series, our third video from Rob O’Hare (PSL in our Tax  team), responds to the question: How should companies approach HMRC for support and what support might they expect?  To listen to Rob’s answer click here.

We will also shortly be releasing an alert explaining the situations when directors can be made personal liability to pay a company tax liabilities.

Our previous videos answering  As we are coming out of the COVID crisis, what should directors be thinking about? and There hasn’t been a wave of insolvencies, is business stress still there or are we through the worst of it? can be accessed through our previous blog.

Business Recovery: What Should UK Directors Be Thinking About Now?

In the second of our short videos in relation to business recovery and resilience, John Alderton (Partner in our Restructuring & Insolvency team), responds to the question:

As we are coming out of the COVID crisis, what should directors be thinking about?

Please click here to listen to John’s answer.

This series of videos are extracts from our business viability webinar, where our panel of experts considered business viability in the current climate, a full recording of which is available here.

We have previously shared our video answering this question:  ‘There hasn’t been a wave of insolvencies, is business stress still there or are we through the worst of it?’ and shared our business viability guide which directors may also find useful.

How to Identify Distress in Your UK Business and Companies You Do Business With

Identifying distress in your own business or those that you do business with is vital to ensuring its financial health.

Some distress indicators are due to external circumstances beyond the control of the directors, but nevertheless can pose a threat to the ongoing success of the business, others are internal, indicating that the directors may need to make operational or financial changes.

The purpose of this guide is to help directors identify distress early.

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