|
Insolvency - L’s remedies |
|
|
The expectation is that there will be an increasing number of T
insolvencies in the near future. It is worth remembering, however, that
the insolvency regime has changed considerably in recent years
(Insolvency Act 2000 and Enterprise Act 2002 have introduced new
options, with greater encouragement towards administration and turning
companies around). Plus, of course, there are the forthcoming changes
to distress (being replaced by the new Commercial Rent Arrears
Recovery system).
This table summarises the availability of both distress and forfeiture,
depending on the type of incorporate insolvency.
Availability of methods of recovery |
| |
Liquidation (voluntary) |
Liquidation (compulsory) |
Administration |
Voluntary arrangement |
| Distress |
Yes – although
liquidator may apply
to stay/restrain |
Not unless commenced
prior to the presentation
of a petition |
Not without permission
of the court or the
consent of the
administrator |
IVA – no (automatic moratorium)
CVA (small and medium companies)
– no, in circumstances where an
application for a moratorium has
been made
CVA (large company) – yes, unless an
application for an administration order
has been made at the same time |
| Forfeiture |
Yes – although
liquidator may apply
to stay/restrain |
By court proceedings –
not without the consent
of the court
Peaceable re-entry –
yes, but may be subject
to challenge |
Not without permission
of the court or the
consent of the
administrator |
IVA – not without permission of the
court (automatic moratorium)
CVA (small and medium companies) –
not without permission of the court in
circumstances where an application
for a moratorium has been made
CVA (large company) – yes, unless an
application for an administration order
has been made at the same time |
The new insolvency regimes are debtor-friendly. Accordingly, Ls may
increasingly have to rely on traditional L&T remedies (eg guarantors, rent
deposits, sub-Ts, and previous Ts. Source: [2008] 205 Property Law
Journal 5. © Practical Lawyer
|
|
April 2008 |
