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In response to the COVID-19 pandemic, legislation was introduced during 2020 to prevent creditors filing statutory demands and winding up petitions on the basis of their debtor's inability to pay its debts, unless it could be shown that non-payment was not a result of the pandemic. These temporary measures had been extended a number of times during the pandemic as businesses continued to suffer the effects of multiple lockdowns and trading restrictions, but are now gradually being phased out. 

The UK Government has announced a further extension to certain protective measures for businesses which are currently in place in response to the COVID-19 pandemic.

During the pandemic, the UK Government has put legislative measures in place to protect commercial tenants by preventing landlords from using certain remedies such as forfeiture and winding up petitions. However, the legislation does not specifically prevent a landlord from issuing debt claims against its tenants for arrears of rent and other amounts due under a lease (see the recent case of Commerz Real Investmentgesellschaft mbh v TFS Stores Limited [2021] EWHC 863 (Ch)).

Travers Smith LLP has advised Virgin Active on its successfully sanctioned, ground-breaking Restructuring Plan.

Travers Smith LLP has advised cruise ship retailer, Harding Brothers Retail Limited (Harding Brothers), on a successful company voluntary arrangement (CVA), a procedure more commonly used by high street retailers. Neil Gostelow and Will Wright from KPMG LLP will oversee the implementation of the CVA, as supervisors.

From 1 December 2020 new changes to the priority rules in insolvency will have a real impact on the recoveries achieved by secured creditors on the insolvency of a debtor. These new rules give HMRC priority above floating charge holders and ordinary unsecured creditors in relation to tax collected by an insolvent company from third parties, such as VAT, PAYE income tax and NICs.

Distressed M&A toolkit

COVID-19 and the resulting economic instability will have an adverse effect on some businesses for months, and potentially years, to come. For private equity investors and other financial sponsors, this will create opportunities to acquire good assets (which may be in need of short/medium term financial support) at attractive valuations.

In this article Natalie Scoones, George Weavil and Jessica Kemp discuss why a debt for equity swap is likely to play a role in many restructurings that result from the downturn triggered by the COVID-19 pandemic. They explain how such transactions are structured, the likely motivations of key stakeholders and the tax and regulatory implications of such transactions.

Travers Smith LLP has advised the Azzurri Group and its joint administrators on its sale through administration to US investment management firm TowerBrook Capital Partners (TowerBrook).  The Azzurri Group is a market leader in the Italian casual dining sector, operating ASK Italian, Zizzi and Coco di Mama with some 300 sites across the United Kingdom and the Republic of Ireland.

On 25 June 2020, new legislation came into force in the UK which makes it much more difficult for suppliers to terminate contracts where the customer is subject to an insolvency procedure. In this briefing, we highlight the key issues that both suppliers and customers should be aware of and consider whether you should amend termination provisions in new contracts.

This briefing was updated on 2 December 2020.

Travers Smith LLP has advised the administrators of noted homeware and fashion retailer Laura Ashley on the sale of its brand to US restructuring and investment firm Gordon Brothers. Gordon Brothers has acquired Laura Ashley's global brand, its archives and related intellectual property out of administration.

Finance partners Ed Smith and Donald Lowe and Knowledge Counsel James Bell recently wrote a chapter on Private Equity Restructuring.

Given the potential business disruption triggered by the COVID-19 Coronavirus, we set out here our thoughts on signing and closing logistics when signatories are forced to work remotely.

Travers Smith LLP has advised long-standing client, the Azzurri Group, on its acquisition of the healthy ‘food-to-go’ chain Pod from its administrators in an accelerated transaction.

Travers Smith has advised the operating company of the Giraffe Restaurants and Ed's Easy Diner brands, on its company voluntary arrangement (CVA). Will Wright and David Costley-Wood of KPMG LLP will oversee the implementation of the CVA.

2018: the year of the CVA

2018 has seen a wave of company voluntary arrangements ("CVAs") hit the market, with high profile companies such as House of Fraser, Carpetright, New Look and Homebase (to name a few) all making use of this restructuring tool. This briefing note explains how a CVA works, provides an overview of current "market" themes, and makes some predictions on the future of CVAs.

Travers Smith LLP has advised Powerleague Fives Limited, a leading provider of 5-a-side football facilities, on its company voluntary arrangement (CVA). The CVA was approved by Powerleague's creditors on 16 May 2018.

Travers Smith LLP has advised Carluccio's Limited, the well-known Italian restaurant chain, on its proposed company voluntary arrangement (CVA).

The new Insolvency Rules 2016 will come into force on 6 April 2017

The existing rules have been extensively amended over the years - 23 times since 1986 - in order to reflect ongoing changes in primary legislation, case law and policy. Regular additions and deletions of text have resulted in, what has been described as, an “impenetrable thicket” of legislation.