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Lexis®PSL announces variations to R3 standard form COVID-19 CVA proposal (Northern Ireland) for administration exits and debt waivers

The following Banking & Finance news provides comprehensive and up to date legal information on Lexis®PSL announces variations to R3 standard form COVID-19 CVA proposal (Northern Ireland) for administration exits and debt waivers

Smooth take off for Malaysia Airlines’ UK scheme of lease liabilities

The following Banking & Finance news provides comprehensive and up to date legal information on Smooth take off for Malaysia Airlines’ UK scheme of lease liabilities

Restructuring proposals and the disenfranchisement of noteholders

The following Restructuring & Insolvency news provides comprehensive and up to date legal information on Restructuring proposals and the disenfranchisement of noteholders

Nature of a security trustee’s powers and duties

The following Banking & Finance news provides comprehensive and up to date legal information on Nature of a security trustee’s powers and duties

Featured Restructuring & Insolvency content

Key elements of a standstill agreement

When restructuring is considered rather than formal insolvency proceedings (see Practice Note: Benefits of restructuring over formal proceedings) the...

What is a statutory declaration of solvency, and what happens if a false declaration of solvency is made

Statutory declaration of solvencyA company enters voluntary liquidation when the members of the company vote to do so by a special resolution. For...

The pari passu principle and collection remedies for the office-holder—the position under the Insolvency (England and Wales) Rules 2016

The primary function of office-holders in personal and corporate insolvency is to collect in the assets belonging to a company or individual and to...

Effect of equitable, contractual and structural subordination

Senior creditors will ensure that in addition to having higher security rights over junior creditors, juniors are also subordinated to them.Generally...

Practice notes

Debt for equity swaps

A popular restructuring method is a debt for equity swap; financial creditors receive equity in the restructured vehicle in return for reducing or...

9th Nov

Practice notes

Winding-up and administration searches for companies at the Central Registry

STOP PRESS: This Practice Note is being updated for the Corporate Insolvency and Governance Act 2020 (CIGA 2020), which introduces a new insolvency...

Produced in partnership with Stephen Allinson 12th Jan

Practice notes

Cashflow and balance sheet tests for insolvency

IntroductionThis Practice Note will give a basic overview of the applicable tests for cashflow and balance sheet insolvency under section 123 of the...

Produced in partnership with South Square 12th Jan

Practice notes

Covenant waivers and resets

One of the initial signs of distress is usually a covenant breach by the company. The lenders may agree to a simple waiver, which cures a temporary...

9th Nov

Practice notes

Role, powers, functions and duties of a liquidator

Coronavirus (COVID-19)This content is affected by the coronavirus (COVID-19) pandemic. For further details, take a look at our Coronavirus (COVID-19)...

9th Nov

Practice notes

Practice Direction on Insolvency Proceedings

Coronavirus (COVID-19)This content contains guidance on subjects impacted by the Coronavirus Act 2020 and related changes to court procedures and...

9th Nov

Practice notes

Loan to value covenants

This Practice Note looks at:•the key features of loan to value (LTV) covenants•possible issues with calling an event of default based on a LTV...

Produced in partnership with Alexander Pelopidas, James Walton and Matthew Brew of Rosling King LLP 12th Jan

Practice notes

Proprietary claims

Creditors are often keen to establish proprietary claims as they create rights in rem (which attach to the property itself) rather than personal...

9th Nov

Practice notes

Equitable accounting—how it works in practice

This Practice Note looks at equitable accounting, what it is, how and when it applies. It does not look at how the trustee in bankruptcy (trustee)...

9th Nov

Practice notes

Court-appointed receivers—when a court will appoint a receiver and who may be appointed

This Practice Note covers receivers who are appointed by the court, including the circumstances in which a court will appoint a receiver and who may...

Produced in partnership with John Hughes of Shakespeare Martineau LLP 12th Jan

Practice notes

Transactions defrauding creditors—claims under section 423 of the Insolvency Act 1986

It is possible for a claim to be brought under section 423 of the Insolvency Act 1986 (IA 1986) against a company or individual following a...

9th Nov

In-house

Practice notes

Insolvency set-off—the position under the Insolvency (England and Wales) Rules 2016

IntroductionSet-off refers to claims that may be set-off against other claims. A set-off is the right of one party, Party A, who is owed money by...

Produced in partnership with South Square and BDO LLP 12th Jan

In-house

Practice notes

Key features of securitisation and asset based lending

BrexitBREXIT: The UK is leaving the EU on Exit Day (as defined in the European Union (Withdrawal) Act 2018). This has an impact on this Practice Note....

9th Nov

Practice notes

A guide to independent business reviews

This Practice Note looks at independent business reviews (IBRs) and aims to:•provide high level guidance around an IBR•identify when an IBR may be...

Produced in partnership with Allan Kelly of RSM 12th Jan

Practice notes

Avoiding invalid floating charges under section 245 of the Insolvency Act 1986

Coronavirus (COVID-19)This content contains guidance on subjects impacted by the Coronavirus Act 2020 and related changes to court procedures and...

9th Nov

Practice notes

Out-of-court administration appointments by a QFCH—the procedure

Coronavirus (COVID-19)This content contains guidance on subjects impacted by the Coronavirus Act 2020 and related changes to court procedures and...

9th Nov

Most recent Q&As content

Q&As

After IP completion day, do the English courts have jurisdiction to place a foreign company into members’ voluntary liquidation under section 221(4) of the Insolvency Act 1986?

For the purposes of this Q&A, it is assumed that there is not some new Act or statutory instrument conferring expanded jurisdiction in respect of...

25th Jan

Q&As

How can UK administration proceedings be recognised in the EU post-IP completion day?

After the transition period: if no deal covering insolvencyThe Insolvency (Amendment) (EU Exit) Regulations 2019, SI 2019/146 (Brexit SI 2019/146)...

25th Jan

Q&As

If a lender makes a loan to a company in a company voluntary arrangement (CVA) which is secured by way of a legal charge, can the lender then rely on the existing CVA as an insolvency event of default in order to enforce the security a few weeks later?

In order for a secured lender to appoint, ordinarily, an event of default has to have occurred under the terms of the loan facility and/or associated...

Produced in partnership with Daniel Sejas of MHS Sprecher Grier 25th Jan

Q&As

With reference to the Corporate Insolvency and Governance Bill, what is the end of the plan or exit from the plan for the ‘cross-class cram down’ scheme of arrangement? Will you have to go to court for them to confirm the terms of it have been satisfied? How will the plan come to an end?

The Corporate Insolvency and Governance Bill (the Bill) received its second reading in the House of Lords on 9 June 2020. The Bill goes to committee...

Produced in partnership with Eleanor Stephens 25th Jan

Q&As

If a joint owner ('the former joint owner') transfers their interest to the other joint owner for no consideration, the remaining joint owner sells to a buyer within five years and the former joint owner becomes bankrupt, can the former joint owner's trustee disturb the transfer to the buyer or claim compensation/damages/payment from the buyer by reason of a transfer at an undervalue by the former joint owner?

Bankruptcy and transactions at undervalueSection 339 of the Insolvency Act 1986 (IA 1986) provides that the trustee of a bankrupt’s estate may apply...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

Under the terms of a company voluntary arrangement, a company has served a break notice on a landlord. The company enters into administration prior to the break date, what is the impact?

Company voluntary arrangementsA company voluntary arrangement (CVA) is a statutory contract between the company and its creditors and is used by a...

22nd Jan

Q&As

Does a distribution of property under a voluntary liquidation need to comply with Part I of the Landlord and Tenant Act 1987 right of first refusal? Does the property vests in the liquidator who is required to distribute in species to the shareholders?

Section 4 of the Landlord and Tenant Act 1987 (LTA 1987) defines 'relevant disposals' as disposals by the landlord of any estate or interest, legal or...

22nd Jan

Q&As

Where a commercial tenant goes into administration, can the administrator sell the tenant company to another company and let the new company into occupation of the property without obtaining the landlord's consent in accordance with the lease? Can the administrator grant a new company a licence to occupy the property without the landlord's consent? If the lease is to be surrendered or disclaimed, can the landlord make a claim for dilapidations? If the lease is to is to be surrendered, is it prudent for the landlord to require a deed of surrender to avoid uncertainty?

Can the administrator sell the tenant company to another company and let the new company into occupation of the property without obtaining the...

22nd Jan

Q&As

Can a landlord contractually avoid the effect of a tenant subsequently entering into a company voluntary arrangement with its creditors by adding a clause or tenant covenant in the lease?

A company voluntary vrrangement (CVA) is a statutory rescue procedure under Part I of the Insolvency Act 1986 (IA 1986). CVAs are a popular mechanism...

22nd Jan

Q&As

Is interest payable on arrears of rent for a period after the appointment of an administrator to a tenant, or does the moratorium prevent interest from accruing?

In administration a company enjoys certain protection from creditors by virtue of a moratorium imposed by paragraph 43 of Schedule B1 to the...

22nd Jan

Q&As

Following the Debenhams decision, a landlord is entitled to forfeit a lease on grounds that its tenant has entered into a company voluntary arrangement (CVA) (where expressly provided for by the lease). What would happen where the landlord forfeits on grounds that a CVA has been proposed but the tenant then applies for relief from forfeiture? If relief were to be granted, that would serve to reinstate the lease—would it therefore be subject to the CVA (including any terms as to reduced rent) again?

It was established in the High Court case of Discovery (Northampton) Ltd v Debenhams Retail Ltd that a company voluntary arrangement (CVA) cannot vary...

22nd Jan

Q&As

A former residential tenant (A) is liable for rent and insurance arrears under an authorised guarantee agreement. Where the arrears pre-date a bankruptcy order made against A, does section 281(5)(a) of the Insolvency Act 1986 mean that the landlord can still issue proceedings and seek to recover the arrears from A? Does the fact that A has been discharged from bankruptcy make any difference?

This is a ‘new’ lease under the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995). Accordingly, presumably the former tenant is liable for...

22nd Jan

Q&As

Does the administration moratorium that arises under paragraphs 42–43 of Schedule B1 to the Insolvency Act 1986, prevent a landlord from implementing a rent review?

A rent review is a process agreed by a landlord and a tenant in a rent review clause in their lease whereby a party (usually a landlord) can send a...

Produced in partnership with Alexander Stewart of Hogarth Chambers 22nd Jan

Q&As

Where a tenant needs to serve a break notice under a lease, but an LPA receiver has been appointed over the landlord's interest, who should the notice be served on?

The appointment of an LPA is a remedy available to a mortgagee seeking to recover sums due under the mortgage granted in their favour. The LPA...

22nd Jan

Q&As

Where a tenant of a commercial lease has gone into administration and vacated a property prior to the contractual end date, there has been no surrender nor forfeiture, and the property has stayed empty, is the landlord entitled to claim the ongoing rent as an unsecured creditor by way of a provable debt in the administration, and what role does the Insolvency Rules 2016, SI 2016/1024, r 14.22 play in this situation?

An application to court for an administration order gives rise to an interim moratorium in respect of claims against the relevant company (paragraph...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 22nd Jan

Q&As

A legal charge over a property was not registered at Companies House or HM Land Registry and the lender now wishes to appoint a receiver. Can the receiver apply the proceeds of sale as per the unregistered charge document or does the fact that the charge is unregistered change this position and the proceeds need to be split between all creditors?

We have assumed that:•the legal charge was executed as a deed and grants a charge by way of legal mortgage over the property•there is a mortgagee able...

20th Jan

Q&As

In relation to the appeal against decision on proof under the Insolvency (England and Wales) Rules 2016, SI 2016/1024, r 14.8(2), is the 21-day deadline based on clear days, business days or just standard days?

The position on appealing proof of debts is set out in Practice Note: Creditor’s appeal against rejection of proof of debt—the position under the...

Produced in partnership with Eleanor Stephens 13th Jan

Q&As

Can new territorial proceedings be commenced in the UK after IP completion day?

Territorial proceedingsBefore IP completion day, Regulation (EU) 2015/848 (OJ L141/19), Recast Regulation on Insolvency (the EU Recast Regulation on...

13th Jan

Q&As

A claimant is pursuing a claim against their former employer in the Employment Tribunal for unfair dismissal and discrimination. What would happen to their claim and/or any settlement agreement reached if the employer becomes insolvent? If the employer does go into administration, what action can be taken to protect the claimant's position? The employer's insurance provider is funding/supporting the litigation. What would be position regarding the insurance company upon the employer becoming insolvent?

When a company or an individual enters into a formal insolvency or enforcement process, restrictions may be imposed on the ability of creditors or...

Produced in partnership with Eleanor Stephens 13th Jan

Q&As

Will the English courts’ assessment of COMI diverge from that of the EU Court of Justice post IP completion day?

This Q&A considers how the English courts will assess a debtor’s centre of main interests (COMI) post-IP completion day as well as the meaning of COMI...

13th Jan