The need for restraint—winding-up petitions and coronavirus (COVID-19) (Travelodge v Prime Aesthetics)

Article summary

Restructuring & Insolvency analysis: This case involved an application to restrain the presentation of a winding-up petition that was being pursued by one of Travelodge’s landlords for unpaid rent. The court granted the injunction principally on the basis of an imminent change to the law, communicated through a ministerial announcement on the then proposed and unpublished Corporate Insolvency and Governance Bill. The government had made it clear they intended to introduce changes which would temporarily prohibit the use of statutory demands and winding-up petitions in circumstances where a company could not pay its debts due to coronavirus (COVID-19). The injunction was also granted on the basis that a winding-up petition would be adverse to creditors as a whole. The evidence suggested that there would be a nil return on a winding-up which was in contrast to Travelodge’s proposed turnaround proposal, which would produce a better return for all creditors. The judge also confirmed that he did not require...