Insolvency Insight - Issue 6 | November 2021

• Published date: 11 November 2021
• Subject Matter: Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy, Arbitration & Dispute Resolution
• Law Firm: Quadrant Chambers
• Author: Mr Jeremy Richmond QC, Joseph Gourgey, Nicola Allsop and Emily Saunderson

OVERVIEW

Welcome to the next edition of the insolvency insight bulletin from the insolvency specialists at Quadrant Chambers. All cases link to the relevant judgments.

Authors: Jeremy Richmond QC and Joseph Gourgey

Editors: Nicola Allsop and Emily Saunderson

Legislation Update

As foreshadowed in the last edition of Insolvency Insight the legislative provisions easing the restrictions on the presentation of winding up petitions entered into effect on 1 October 2021.

The Corporate Insolvency and Governance Act 2020 restricted the presentation of winding up petitions in that a petition could not be presented on the basis of a statutory demand or on the basis of other evidence of a company's inability to pay unless the petitioning creditor had reasonable grounds to believe that either (a) COVID-19 did not have a financial effect on the company; or (b) that the company would have been unable pay its debts even if COVID-19 had had a financial effect on the company.

From 1 October 2021 until 31 March 2022 a petitioning creditor must now satisfy four conditions:

• Condition A: the debt owed: (i) is for a liquidated amount (ii) has fallen due for payment; and (iii) is not rent or any other payments that are due under a relevant business tenancy;
• Condition B: the petitioning creditor has delivered a written notice to the company containing, inter alia, a statement: (i) that the creditor is seeking the company's proposal for the payment of the debt; and (ii) that if no satisfactory proposal is made within 21 days of the date of delivery of the notice then the creditor intends to petition for the company's winding-up (a Condition B Notice);
• Condition C: 21 days have passed since the delivery of the Condition B Notice and the company has not made a satisfactory proposal to the creditor for the payment of the debt; and
• Condition D: the debt owed to the petitioning creditor (or a group of petitioning creditors provided they have all met Conditions A to C) is at least '10,000.
• A creditor can apply to court for an order that Conditions B and C shall not apply or that the 21-day time period in Condition C be abridged.

On 9 November 2021 the Department for Business, Energy and Industrial Strategy announced that it was introducing a Commercial Rent (Coronavirus) Bill and a new Code of Practice to address the issue of commercial rent debts accrued during the pandemic. The Bill is due to be implemented from 25 March 2022 and will establish an arbitration procedure pursuant to...