Insolvency Insight - Issue 9 | March 2022

• Published date: 30 March 2022
• Subject Matter: Corporate/Commercial Law, Insolvency/Bankruptcy/Re-structuring, Charities & Non-Profits , Corporate and Company Law, Insolvency/Bankruptcy, Contracts and Commercial Law
• Law Firm: Quadrant Chambers
• Author: Mr Joseph England

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

Legislation

• The Department for Business, Energy and Industrial Strategy has issued draft statutory guidance on how arbitrators should exercise their functions under Part 2 of the Commercial Rent (Coronavirus) Bill 2021-22. The legislation is aimed at resolving disputes over commercial rent arrears that accrued while businesses were forced to close during the COVID-19 pandemic. It introduces a new binding statutory arbitration process to resolve claims for rent arrears during such periods.
• The Charities Act 2022 finally received Royal Ascent. In terms of insolvency related matters, s.18 now excludes the exception previously in the Charities Act 2011, of a disposition or mortgage of charity land by a liquidator/receiver/administrator.

Cases

• Section 901C(3) of the Companies Act 2006 provides that every creditor or shareholder of a company whose rights are affected by a restructuring plan must be permitted to participate in a class of creditors' meeting. Section 901C(4) allows this to be disapplied where the Court is satisfied that no member of that class has "a genuine economic interest in the company" In Re Smile Telecoms Holdings Ltd [2022] EWHC 387 (Ch), Miles J permitted, for the first time, such an application In doing so, he set out the principles for s.901C(4) applications including judging, to the civil standard, a genuine economic interest by referring to the alternative for the company if the restructuring plan is not sanctioned.
• In Minor Hotel Group MEA DMCC v Dymant [2022] EWHC 340 (Ch), Sir Alistair Norris returned to the Chancery Division to deal with a relatively novel point on a monitor's duty where the company is unable to pay a pre-moratorium debt holding that the company is deemed able to pay such debts if it had the "immediate" prospect of receiving sufficient funds (from a third party here). When judging the...