The UK Government has published further guidance, late on the evening of Friday 12 June 2020, in relation to the Furlough Scheme. In light of this, we have produced an update highlighting the key and important changes that are being made.

To read the full update, please visit MayerBrown.com.

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The spread of COVID-19 has forced the mass closure of workspace and the implementation of work-from-home policies in the majority of industries.

As the UK contemplates easing lockdown measures, businesses are having to consider what the world of work will look like in the “new normal”. But what does that “new normal” look like and

The Corporate Insolvency and Governance Bill (“Bill”) published on 20 May 2020 proposes to introduce a number of significant reforms to UK restructuring and insolvency law . The scope of the Bill is wide ranging and includes measures to protect companies in financial difficulty as a result of the current pandemic. Several of the provisions contained in the Bill will have particular impact on the landlord and tenant relationship during the current COVID-19 crisis, which is the focus of this article.

Continue Reading The Corporate Insolvency and Governance Bill – Impact on Commercial Property

There has been much discussion of late around the effect of COVID-19 on leases, focusing in particular on the non-payment of rents by tenants and the limitation on the landlord’s usual arsenal of options for non-payment. As the lockdown eases and tenants prepare to return to their premises, there are likely to be other lease provisions which need to be considered by landlords and tenants. This article considers a number of typical lease provisions which tenants may like to consider.

Continue Reading The Return to Work: COVID-19 Considerations for Leases

The Corporate Insolvency and Governance Bill 2020 (the “Bill“) introduces a flexible restructuring compromise or arrangement for companies in financial difficulty (the “Restructuring Plan“). It is proposed that the legislation governing the Restructuring Plan will sit alongside the schemes of arrangement and be included in a new Part 26A to the Companies Act 2006.

The Restructuring Plan will not apply to companies that are solvent with no risk of insolvency; rather it will only apply where two conditions are satisfied:

  • condition A: the company has encountered, or is likely to encounter, financial difficulties that are affecting, or will or may affect, its ability to carry on business as a going concern; and
  • condition B: a compromise or arrangement is proposed between the company and (a) its creditors, or any class of them; or (b) its members, or any class of them; and the purpose of the compromise or arrangement is to eliminate, reduce or prevent, or mitigate the effect of, any of those financial difficulties.

The Restructuring Plan may be proposed by the company, or its creditors, shareholders, liquidators or administrators. When the insolvency reforms were originally proposed, it was intended that the company be given exclusivity for a certain period to propose the Restructuring Plan. This exclusivity period would mirror the position in the US; however this is not included in the Bill, as drafted.


Continue Reading Restructuring Plan for Companies in Financial Difficulty – Changes Introduced by the UK Corporate Insolvency and Governance Bill

On 20 May 2020, the UK Government published the Corporate Insolvency and Governance Bill (“CIGB” or the “Bill”) which proposes several changes aimed at improving the chances of company rescue and better overall returns for creditors. One of the proposed changes is to restrict parties’ ability to exercise contractual termination rights where a company enters into an insolvency or restructuring procedure, meaning that for most suppliers and supply contracts a termination clause will be ineffective upon insolvency. This will align the approach in the UK with that of a number of other jurisdictions.

These clauses can be referred to as “ipso facto” clauses; ipso facto translating to ‘by the very fact’. This extrapolates to situations where a party seeks to terminate a contract by the very fact of insolvency.


Continue Reading Corporate Insolvency and Governance Bill – Restrictions Placed on the Exercise of Contractual Termination Provisions

On 20 May 2020, the UK government announced the Corporate Insolvency and Governance Bill (the “Bill”), introducing a mixture of permanent and temporary measures, the latter being in response to the financial challenges companies are facing as a result of the Covid-19 pandemic and lockdown. In the absence of extensive consultation with insolvency practitioners and industry experts, it remains to be seen how effective the measures will be in practice.

As anticipated, a new standalone moratorium, overseen by a “monitor”, has been introduced. The provisions largely mirror those put forward during the limited consultation in 2018 – the purpose being to provide a company with the breathing space to explore a rescue or restructuring of the business, which includes the newly introduced restructuring plan. It is not intended that the company has the form of rescue/restructuring in mind at the time the moratorium is applied for and the moratorium is not a gateway to any particular insolvency process. Notably, the moratorium enables the directors to remain in day to day control of the business and enables them to lead discussions regarding rescue and restructuring, albeit we expect that the monitor will provide invaluable knowledge and guidance in crafting the best form of rescue/restructuring. Current timelines indicate that companies may be able to seek this new moratorium as early as the end of June 2020.


Continue Reading Standalone Moratorium for Companies – Changes Introduced by the UK Corporate Insolvency & Governance Bill