Moratorium meaning

This Checklist should be read in conjunction with the Practice Note: Block transfer orders—the law and practice. Read this Checklist alongside the Practice Note: Block transfer orders—the law and practice. There are three principal scenarios that necessitate a block transfer of office-holder appointments: where an office-holder dies on the retirement of an office-holder from practice where an office-holder is otherwise unable or unwilling to continue in office. This may happen if an office-holder moves firms, or loses their licence to practise as a result of regulatory action The Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, rr 12.35–12.38, govern applications to the court for the block transfer of cases from one office-holder to another. The block transfer application process applies to the following types of appointment: compulsory liquidation (winding up by the court) voluntary liquidation (both members’ voluntary liquidations and creditors’ voluntary liquidations) administration bankruptcy voluntary arrangement (both company voluntary...

Debt relief orders Debt relief orders (DROs) are a bankruptcy alternative, governed by sections 251A–251X and Schedule 4ZA of the Insolvency Act 1986 (IA 1986), and by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, Pt 9. A DRO shields a debtor from liabilities by staying any further legal steps without the court’s leave and, after twelve months, releases the debtor from those debts. The key distinction from bankruptcy is scope: DROs apply only to individuals with no meaningful assets and no income beyond what is required for their reasonable needs, and there is no regime for collecting, realising or distributing the debtor’s estate, on the footing that there will be nothing to share. As explained in R (on the application of Payne) v Secretary of State for Work and Pensions, DROs are “a new and simplified way of wiping the slate clean for debtors who are too poor to go bankrupt.” For more detail, see Practice Note: Debt relief orders (DROs)...

Options available to landlord This flowchart outlines the choices open to a landlord when a corporate tenant ceases paying rent on a commercial property, and the actions that might be pursued to recoup arrears. At every stage, the effect of limits imposed by the insolvency regime must be assessed, and further guidance is set out in the Insolvency regime restrictions—table below...

This Flowchart This Flowchart supports your decision on whether a data protection impact assessment (DPIA) is necessary when initiating a new project that involves personal data from the outset, helping you decide effectively. It sets out: three scenarios in which a DPIA is mandatory under Article 35(3) of Assimilated Regulation (EU) 2016/679, UK General Data Protection Regulation (UK GDPR); and ten further processing activities for which the Information Commissioner’s Office (ICO) requires a DPIA to be carried out Where a DPIA is not needed, you should think about using a simpler form of review, which we call a privacy impact assessment (PIA) instead. The Flowchart enables you to determine which assessment—DPIA or PIA—best fits your project in practice. For additional guidance on DPIAs and PIAs, see Practice Note: How to complete a data protection impact assessment—DPIA...

In this issue: Trade in goods Free trade agreements WTO Customs LexTalk®International Trade: a Lexis®Nexis community Daily and weekly news alerts New and updated content New Q&As Trade in goods Legislation to be introduced on digital labelling of products The Department for Business and Trade will introduce legislation to allow digital product labelling and to maintain indefinite recognition of the CE marking for goods such as toys and machinery. With digital labelling, companies can place regulatory or manufacturing details online instead of printing them on the product. These reforms follow the Product Safety Review consultation and engagement with industry. See: LNB News 25/01/2024 19. Free trade agreements New EU-UK joint solution under Windsor Framework on TRQs adopted The European Commission has endorsed a proposal outlining a new EU-UK joint solution under the Windsor Framework on the use of TRQs by Northern Ireland businesses. The proposal suggests revising the section on ‘goods not...

In this issue: International Arbitration Investment treaty arbitration Institutional and ad hoc arbitration Other arbitration and ADR-related news and developments Daily and weekly news alerts New and updated content Useful information International Arbitration Singapore—carve-out from restructuring moratorium granted in favour of arbitration In restructuring, it is vital that a debtor is afforded time and space to craft its plan. This is usually delivered by a moratorium, preventing third parties from initiating actions against the company or its assets. That safeguard can create friction with arbitration. In a pro-arbitration seat like Singapore, must the court invariably permit an exception to the moratorium to let a third party commence arbitration against the debtor? In Sapura Fabrication v GAS, the Singapore Court of Appeal ruled there is no automatic obligation to allow such a carve-out. The court, however, retains discretion to grant one. Factors guiding the decision include the nature of the intended claim, the timing of the request...

What are the practical implications of this case? In a standard, rather than mental health, breathing space moratorium, a creditor will generally find it simpler to persuade the court to continue with a bankruptcy petition already on foot than to secure permission to present a fresh petition, because, in the former scenario, the court’s discretion is not constrained by the limitations imposed by the breathing space legislation, whereas seeking to present during the moratorium engages those constraints. Moreover, in applying those statutory limits, where the debtor has had ample time to obtain advice, explore alternative solutions, and prepare adequately for a hearing, allowing the petition to proceed will not be viewed as causing the debtor any detriment. A petition will also not constitute an abuse of process for an extraneous purpose merely because a creditor is angry or vengeful; rather, there must be evidence showing that the petition was brought with the intention of harming the debtor, as opposed to legitimately setting the bankruptcy process in motion. Accordingly, continuation...

What is a CVA? A company voluntary arrangement (CVA) is a form of insolvency that permits a company to enter a binding agreement with its creditors to compromise unsecured debts or otherwise agree how its affairs are handled. The directors continue to run the business, under the oversight of an insolvency practitioner. Retailers, particularly those with extensive property portfolios, frequently adopt so‑called ‘landlord CVAs’ to reset rental commitments and shut loss‑making stores. This note outlines how property law and landlord and tenant considerations may emerge under such a CVA. It highlights provisions commonly included in CVAs and explains how they tend to work in practice. Nevertheless, each CVA will vary according to the precise terms proposed. It is therefore vital to examine the CVA proposal carefully to assess its effect on creditors. This note does not provide detailed guidance on the mechanics of approving and implementing a CVA. For Practice Notes addressing the CVA procedure, see: Company voluntary arrangements—an introductory guide The CVA proposal and...

Background The coronavirus (COVID-19) outbreak triggered unparalleled social distancing requirements and nationwide lockdowns. Consequently, courts—and those who use them—were severely hindered in performing routine functions both administratively and practically. In turn, the judiciary adopted fresh protocols and processes, with operational arrangements being reshaped at pace and hearings adjusted accordingly on an urgent basis. See Practice Note: Coronavirus (COVID-19)—Changes to the court process in insolvency proceedings [Archived]. To build on these steps, and to address particular difficulties arising in insolvency matters, a Temporary Insolvency Practice Direction (TIPD) came into force on 6 April 2020. It addressed COVID-19 issues including court procedure and permitting virtual statutory declarations for commencing administration proceedings where distancing rules applied, together with assorted insolvency points that were unclear under the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024 and affected by inconsistent authorities. These included questions about the validity and the precise effective time of applications and documents filed electronically via the CE-filing system when appointing an administrator by utilising the out-of-court route, and...

The outcome of an administration will frequently hinge on the worth of the company’s assets and the administrator’s capacity to handle those assets freely so as to secure the best possible result for creditors as a whole. The administrator is granted extensive powers to deal with property, including assets encumbered by various forms of security and quasi-security (for example, hire purchase or retention of title arrangements). A key advantage of administration is the protection created by the moratorium against enforcement by creditors, which permits the administrator to proceed without the constraints the company may have experienced before administration. The administrator may intend to sell or otherwise deploy charged property in order to meet one of the purposes of the administration, while, by contrast, a creditor may wish to enforce its security and recover what it is entitled to from a company it regards as at risk. These competing requirements need to be held in balance between administrator and creditor...

Letter for sub-contractor to send to employer in the event of main contractor insolvency [ [ Sub-contractor’s headed notepaper ] OR [ Sub-contractor’s address ] ] [ contact name, job title and department ] [ name of employer company ] [ address ] Dear [ contact name ] [ name of project ]—[ name of main contractor ]—Insolvency We believe that [ name of main contractor ] [ has entered into administration OR is in liquidation OR has commenced a moratorium OR other ] ....

CASE NO: [ insert case number ] [ WITHIN THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES, INSOLVENCY AND COMPANIES LIST (ChD); ALTERNATIVELY, AT THE HIGH COURT OF JUSTICE, BUSINESS AND PROPERTY COURTS IN [ insert location ], INSOLVENCY AND COMPANIES LIST (ChD); OR AT COUNTY COURT SITTING AT [ insert location ], BUSINESS AND PROPERTY WORK ] BEFORE [DEPUTY] INSOLVENCY AND COMPANIES COURT JUDGE...

Application notice in insolvency proceedings (corporate) Insolvency Act Application Notice Note: Use this precedent alongside an application notice template compliant with the Insolvency (England and Wales) Rules 2016, SI 2016/1024—see (Form IAA) IR 2016, r1.35 VAR Insolvency Act Application Notice... Case no: [insert case number] Court: [select the appropriate High Court listing and location, or County Court at [location], Business and Property Work] In the matter of: [insert company’s name] and the Insolvency Act 1986 Parties: [Applicant] v [Respondent(s)] Statutory basis: paragraph 43 [relevant sub‑section] of Schedule B1 to the Insolvency Act 1986 Applicant/Respondent details: [names and addresses] Company details: [subject of the proceedings] Judge level and venue: [identify judge] in [court or hearing centre] Within existing insolvency proceedings: YES/NO; court reference: [insert] Relief sought: Permission for [Applicant] to commence [describe claim, e.g. repossession of goods] against [company] (in administration) under paragraph 43 [sub‑section] Schedule B1. Costs against the...

In this Q&A, we assume that B’s claim is smaller than A’s. Legal process against the company Under paragraph 43(2) of Schedule B1 to the Insolvency Act 1986 (IA 1986), the moratorium prevents any legal process—covering legal proceedings, execution, distress and diligence—from being started or continued against the company or its property without the administrator’s consent or the court’s permission. This wording is wide enough to encompass any remaining actions or steps that might otherwise be taken against the company or its property. Accordingly, B can only bring an action against A with the approval of the administrator or the leave of the court. The purpose of the moratorium (and the interim moratorium) is to safeguard the company and its assets from creditor action during the company’s administration and the pre-appointment period. It bars any steps, actions or processes from being begun or carried on against the company and its property, save with the administrator’s consent (if one is appointed) or the court’s permission. See Practice...

This Q&A This Q&A explores the steps administrators should take to contest a landlord’s attempt to forfeit a lease by peaceable re-entry, carried out unaware of an interim moratorium triggered by lodging a notice of intention to appoint administrators (NOI). An NOI is to be lodged by the directors or the company in advance of making an out of court appointment pursuant to Schedule B1, paragraph 22, of the Insolvency Act 1986 (IA 1986). This Q&A does not address a case where no NOI has been lodged. Where a company or its directors intend to appoint an administrator via the out of court route, they begin by filing an NOI, which imposes an interim moratorium under IA 1986, Sch B1, paras 44(2), 44(4). After the NOI is placed before the court, notice must also be served on the ‘prescribed persons’, including any party known to have levied distress against the company or its assets (Insolvency (England and Wales) Rules 2016, SI 2016/1024, r 3.23(4); IA 1986, Sch B1, para...

Part II of the Landlord and Tenant Act 1954 (LTA 1954) Part II of the LTA 1954 confers security of tenure on business tenants unless its requirements have been contracted out. As a result, a commercial lease does not lapse by effluxion of time; instead it continues as a statutory tenancy until it is brought to an end in accordance with the LTA 1954, or when the court grants a new lease on the application of either the landlord or the tenant, or when the lease is terminated by surrender or by forfeiture under the scheme set out therein in full...