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Commercial Property Litigation Seminar Thursday 7 th November 2019 Today’s Speakers: Maria Koureas Jones, Woodfines Solicitors James Newman, Ely Place Chambers
Commercial Property Litigation Seminar
Thursday 7th November 2019
Today’s Speakers: Maria Koureas Jones, Woodfines Solicitors James Newman, Ely Place Chambers
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Who is here today
Andrew Carter Partner, Head of Litigation Milton Keynes E: [email protected] T: 01908 202153
Maria Koureas-Jones Partner, Cambridge Head of Dispute Resolution E: [email protected] T: 01223 488833
Rita Wright Chartered Legal Executive Commercial Litigation Cambridge E: [email protected] T: 01222 411421
Alev Tonks Solicitor, Litigation Milton Keynes E: [email protected] T: 01908 202150
Claire Spencer Solicitor, Litigation Bedford E: [email protected] T: 01234 760038
Eoin Longworth Trainee Solicitor Commercial Property Bedford E: [email protected] T: 01234 760038
Kassilyn Carry Paralegal Commercial Property Bedford E: [email protected] T: 01234 760038
Reena Mistry Solicitor, Commercial Property Milton Keynes E: [email protected] T: 01908 202156
Suzanna Stephenson Partner, Commercial Property Milton Keynes E: [email protected] T: 01908 202156
Charlotte Benjamin Partner, Commercial Property Bedford E: [email protected] T: 01234 760038
Today’s Speakers
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James Newman Ely Place Chambers
Maria Koureas-Jones Partner, Dispute Resolution , Woodfines E: [email protected]
T: 01223 488833
Commercial Insolvencies – What do the stats say?
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Insolvency Service Statistics issued on 30 October 2019:
Q3 – July – September 2019:
• Increase in Commercial Insolvencies in this quarter when compared with Q2 – an increase for the third
successive quarter:
• Administrations have reached their highest quarterly level since 2014 continuing recent patterns of growth
(still lower than the numbers in the 2008/2009 recession):
• Creditors Voluntary Liquidations (Insolvent Liquidations) have reached their highest quarterly levels since
2012:
• Compulsory Liquidations (those instigated by a Winding up Petition) are down for the third successive
quarter:
• CVAs continue at a fairly similar level in Q3 when compared to Q1 and Q2:
• Key sectors facing Insolvencies in Q3:
• Construction (3106 Insolvencies) / Administrative & Support Service (2583 Insolvencies) / Wholesale
Retail and Trade and repair of vehicles (2409 Insolvencies) / Accommodation and Food Services /
Manufacturing / Information and Communication.
Personal Insolvencies – What do the stats say?
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Insolvency Service Statistics issued on 30 October 2019:
Q3 – July – September 2019:
• Increase in Personal Insolvencies in this quarter when compared with Q2:
• Increase in Individual Voluntary Arrangements with the last 4 quarters having experienced the highest level
of IVAs since 2010:
• Decrease in bankruptcies – whilst there has been a decrease in bankruptcies flowing from creditors
petitions there has been an increase in debtors filing for their own bankruptcy. Bankruptcies do however
remain historically low:
• 30,879 Personal Insolvencies in the quarter:
Predictions for 2020
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Corporate Insolvencies
- We expect the same sectors to be the “ones to watch” (Construction and Retail in particular)
- We expect the Transport and Regulatory sector to experience financial difficulties given the impact that
Brexit will have on the industry - staffing / profit margins. etc
- We expect to see a continuance of the current upward trend in Commercial Insolvencies
Personal Insolvencies
- We expect to see a continuance of the current upward trend in Personal Insolvencies (particularly in relation
to IVA’s):
Why are these statistics important in Property?
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• Landlords need to be aware of the increase in insolvencies and their risk exposure as a result:
• Landlords need to be aware of their options where a Tenant enters an insolvency process or threatens to
do so:
• Landlords need to factor in the risk of insolvency (and defaults under the lease as a result) at the outset of
the Landlord and Tenant relationship and consider how steps can be taken to minimise their loss:
• Tenants need to be aware of their options where a Landlord enters an insolvency process or threatens to
do so:
Ely Place Chambers present
Dealing with Insolvent Tenants
James Newman
Tenant has not paid its rent- What can the landlord do?
• Be proactive • Forfeiture • Draw down on rent deposit • Pursue guarantor or former tenant • Court Proceedings to recover debt • Commercial Rent Arrears Recovery (CRAR) • Statutory Demand and Insolvency
Proceedings • Payment Agreement
Considerations
• Is it in the landlords’ commercial interest to take the property back?
• Does the landlord want the property back? • Are there any other breaches of the lease? • How solvent is the tenant generally? • How cost efficient is each remedy balanced
against how long it will take to get payment of the arrears?
What if Tenant is insolvent?
Company Voluntary Arrangement • CVA Moratorium for small companies (satisfies two or more of the
following)–
• A turnover no greater than £10.2 million • Balance sheet assets no greater than £5.1M • No more than 50 employees.
• Once Company filed at court for the moratorium, leave of the court is needed to:
• Exercise CRAR • Forfeit the lease by peaceable re-entry • Begin any court proceedings, including forfeiture proceedings • Take any steps to enforce security
Administration
• Without permission of the Court the Statutory moratorium prevents landlord from: • Exercise CRAR • Forfeiting the lease by peaceable re-entry • Begin or continuing any court proceedings • Take any steps to enforce any security
LPA Receiver
• The appointment of an LPA Receiver does not affect the landlord’s rights to: • Exercise CRAR • Sue for rent • Forfeit the lease (whether by court action or
peaceable re-entry) Any of these actions can be taken without the leave of the court or the consent of the LPA Receiver.
Voluntary Winding Up
• The Landlord can (without permission from the court) • Exercise CRAR • Sue for rent • Forfeit the lease, whether by court action or
peaceable re-entry
Compulsory Winding Up
• Suing for rent: • Between presentation of the petition and the making of
the order the landlord can begin an action for arrears without the leave of the court. However, another creditor, the company, or a contributory can apply to have the action stayed.
• After the winding up order has been made, leave is needed to begin or continue any action for rent.
Forfeiture – same as for rent
Compulsory Winding Up
• Exercising CRAR: • Landlord can be required to account to the preferential creditors for
the exercise of CRAR within the three months before the winding-up order is made.
• If the landlord began the CRAR process before the presentation of the petition for winding-up, the landlord can continue the process but once petition presented it can be stayed.
• Once the winding-up order has been made, the landlord needs leave of the court to continue with the exercise of CRAR.
Contact Us
Richard Sheehan: [email protected] Kevin Morrow: [email protected] Dave Lovitt [email protected]
