Welcome to the spring edition of our restructuring and insolvency bulletin.
Things are heating-up in the ongoing landlord vs. tenant rent debate. Just in the last couple of weeks the High Court has rejected a landlord challenge to New Look’s CVA before days later sanctioning Virgin Active’s restructuring plan. A victory of sorts for the landlords followed with the High Court’s decision to revoke the Regis CVA, but in doing so the court rejected most of the challenge grounds advanced by the landlords and in any event the CVA had already long-since terminated.
There are signs that the landlords are fighting back. Witness, for example, the recent landlord victories against The Fragrance Shop and separately against Sports Direct, Cineworld and Mecca Bingo, with the courts awarding summary judgment for unpaid COVID-19 rents. And let’s see how the landlords get on when taking their appeal of the New Look CVA judgment to the Court of Appeal.
According to the Insolvency Service all forms of corporate insolvency procedure saw a downward trend during the first quarter of this year by comparison to the same period last year. Will this trend continue? Certainly the High Court’s sanction of the Deep Ocean and Virgin Active restructuring plans will provide encouragement to others such as NCP who are thinking of using the “cross class cram-down” mechanism under this new procedure. Whilst still more high street occupants – the latest among them including Drake & Morgan – are turning to CVAs. All eyes are focused on 30 June – will the forfeiture moratorium finally fall away?
Read on below for more on the above and other topics. And enjoy your summer break if you manage to get away!
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Tim Carter
Matthew Padian
Louise Corcoran
Helen Martin