UK Government Extends Coronavirus Job Retention Scheme

Following the UK Prime Minister’s announcement on Saturday night that England will enter a second national lockdown on Thursday 5 November, HM Treasury has confirmed that the Coronavirus Job Retention Scheme (CJRS) that was due to close at the end of October will be extended for a month (for now!). The introduction of the Job Support Scheme (JSS) has been postponed until the CJRS ends.  See our employment colleagues alert for further comment about this change.

Have qualifying floating chargeholders lost control over the UK administration appointment process?

Earlier in the year, we published a blog regarding the impact of the moratorium introduced by the Corporate Insolvency and Governance Act 2020. In particular, we flagged that the moratorium may result in a significant loss of control for secured lenders and qualified floating charge holders (QFCH). In a recent case, Re Tokenhouse VB Limited [2020] EWHC 3171 (Ch) (Tokenhouse), ICC Judge Jones has dealt another blow to QFCHs’ control by finding that failure to serve a notice of intention to appoint administrators (NOI) by directors of a company on a QFCH does not automatically void an administration.

This finding may come as a surprise given that the reason for giving notice is to enable a QFCH the opportunity to appoint its preferred choice of administrator.  QFCHs should therefore be aware of the risk that the appointment of an administrator may be valid, even if they don’t receive an NOI.

The court found that failure to give notice was a defect capable of remedy, however despite the court recognising that the QFCH was prejudiced by losing its right to appoint its own administrators it does not necessarily follow in all cases that the court will remedy that by appointing the QFCHs chosen administrators.

The judge considered what the purpose of serving the NOI was and whether parliament intended  that failure to give notice would automatically void the administration, concluding that parliament could not have intended that to be the consequence. Continue Reading

Webinar Recording: What Happens After the Election? – What the Outcome of the Presidential and Senate Races Might Mean for the Economy, Key Industries and Municipalities

On Friday, October 16, 2020 we hosted a webinar along with the American Bankruptcy Institute, that featured a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, former Congressman and Chairman of the Democratic Caucus Joseph Crowley, former Congressman Bill Shuster, former Secretary of Transportation Rodney Slater, Karol Denniston and Ed Newberry. The panel was moderated by Stephen Lerner.

The discussion included the election, the US Supreme Court, the political impact of a Trump or Biden administration, the possible change of control in the Senate, and what all of this means for unemployment and future stimulus programs, interest rates, taxes, infrastructure and the US economy in 2021. The panel also discussed what is happening with our cities, states, industries and non-profit institutions, and how political changes could either improve or worsen our current situation.

A recording of this webinar is available.

The Future Remains Uncertain as Australia Introduces Its New Debtor-in-Possession Insolvency Laws

In late September 2020, the federal government announced that it would be introducing changes to Australia’s Corporations Act (Act) and the most significant amendments to the corporate insolvency regimes in decades. The main objective is to help the small business sector deal with and overcome the economic, financial and trading challenges posed by the ongoing pandemic. Since then, the government has released its new laws via the Corporations Amendment (Corporation Insolvency Reforms) Bill 2020 (Cth) (New Laws).

The New Laws represent a monumental shift in the mindset underpinning Australia’s restructuring and insolvency regime from a predominantly creditor-led system to now a hybrid of creditor-led and debtor-in-possession processes.

For more information, please download our insight.

Mandatory independent scrutiny of pre-pack sales to connected parties to be introduced in the UK

On 8 October 2020, the UK government published a report reviewing voluntary measures introduced in 2015 to improve the transparency of pre-pack sales in administration.

There is no legal definition of a pre-pack, although the term is used to explain the sale of a insolvent business by an administrator back to existing management (usually on or shortly after their appointment).  This is often the best outcome for creditors, providing a better return; but because the sale is to a connected party, creditors lack confidence in the process.

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