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"On 24 September 2020, the Government announced that it would extend the duration of some (not all) of the Act’s temporary measures. The aim being to continue to provide a breathing space to companies whilst coronavirus related restrictions remain in place (including social distancing and regional lockdowns)."
"The permanent insolvency measures contained in the Act (previously announced by the Government, and in development before Covid-19) represent a major change to UK insolvency law and, in some ways, represents a shift toward a business rescue culture more in line with U.S. insolvency (chapter 11). The new permanent measures are:
A new restructuring plan to help viable companies struggling with debt obligations. The court can only sanction a restructuring plan (that binds creditors) if it is “fair and equitable”. In other words, creditors vote on the plan, but the court can impose it on dissenting creditors (known as “cross-class cram down”)"
Legislation which came into force in 2020.....
"A much awaited feature of the new Restructuring Plan has been the ability to cram down the plan on dissenting junior classes of creditors or shareholders who may be 'out of the money':
Under the CIGA, the court is given the power to disapply certain shareholder rights to implement a Restructuring Plan, including in particular shareholders' rights of pre-emption and the requirement to seek shareholder authority to allot and issue further shares. Prior to the CIGA, such rights had often given shareholders a right of consent over equity issued as part of a debt for equity swap. It now appears possible to remove that consent right through the court as part of a Restructuring Plan. This may well change the dynamics of negotiations between shareholders and lenders in some complex debt restructurings."
"In July 2020, Virgin Atlantic Airways was the first to launch a Restructuring Plan, which proposed to implement a solvent recapitalization to raise c. £1.2bn (further details of which are considered here).
A significant judgment was also handed down in February 2021 in connection with the gategroup Restructuring Plan. The High Court concluded that Restructuring Plans are insolvency proceedings falling outside the scope of the Lugano Convention1, marking a clear departure from established case law on schemes of arrangement"