Insolvency

• But since the 1980s, the UK has made it a priority to throw a lifeline to struggling companies.
• It appears, however, that these efforts to enhance the law are being hampered by sloppy language in the media, increasing the stigma around insolvency and potentially deterring businesses from seeking help.
• So what is the correct language to use when we’re discussing insolvency?

Corporate insolvency law

• They are found in the Insolvency Act 1986 (liquidation, administration, company voluntary arrangements (CVAs) and standalone moratoriums) and in the Companies Act 2006 (schemes of arrangement and restructuring plans).
• The liquidator then distributes the value of the assets among the creditors of the company in a ranked order, known as the “insolvency waterfall”.
• It is a voluntary arrangement between the company and its creditors, supervised and approved by an insolvency practitioner (that is, someone who is licensed to act on behalf of an insolvent company).
• For example, after calling in administrators earlier this year, The Body Shop is now thought to be seeking a CVA.

• Directors are given 20 business days to assess their rescue and recovery options.
• The scheme of arrangement, regulated by the Companies Act 2006, is a procedure available to companies that are not yet insolvent.
• Think of it as something akin to an individual consolidating their credit cards, or arranging a plan to repay arrears.

The reality of corporate insolvency

• Clearly, the legislative priority in the UK over the past 40 years has been to promote corporate rescue and renewal.
• This should, in principle, be particularly useful to British businesses at a time when the UK has seen a record number of business failures, with no fewer than 26,595 corporate insolvencies in 2023.
• That figure is 14% higher than in 2022 and 43% higher than pre-pandemic levels in 2019.
• With an increasing number of companies in financial difficulty, we might have expected that corporate rescue cases would have risen too.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

• Seyfarth Shaw LLP announced today that James M. Sullivan , an experienced corporate restructuring and bankruptcy lawyer, has joined the firm as partner in its corporate department and a member of the newly formed Restructuring & Insolvency practice.
• Sullivan’s arrival further augments the firm’s New York office, which is now nearly as large as Chicago, its largest office.
• “We are excited to continue the upward growth trajectory of our New York office and our Corporate department with the arrival of James,” said New York Managing Partner John P. Napoli .
• In addition to his bankruptcy and restructuring work, Sullivan has a corporate transactional practice, including counseling borrowers and lenders in acquisition and corporate financing, and he also handles commercial and real estate litigation matters.

• The CDBV program requires the successful completion of an intensive three-part course of study and uniform written examination and demonstration of practical knowledge by case experience and references.
• Having completed the requirements for certification in 2023, AIRA has awarded Ann Marriott Payne of D.R.
• Ms. Payne is also a holder of AIRA's Certified Insolvency and Restructuring Advisor (CIRA) certification.
• The Association of Insolvency and Restructuring Advisors (AIRA) is a nonprofit professional association serving financial advisors, accountants, crisis managers, business turnaround consultants, lenders, investment bankers, attorneys, trustees, and other individuals involved in the fields of business turnaround, restructuring, bankruptcy, and insolvency.

• Seyfarth Shaw LLP continues the national expansion of its Corporate department – launching a Restructuring & Insolvency practice and growing its Servicing & Special Servicing practice with three prominent partners, Jason DeJonker , Scott Olson and Richard (“Rick”) White .
• White, who is in Atlanta, joins the Servicing & Special Servicing practice , which advises clients on issues involving securitization, tax, securities law, defeasance, and loan assumptions and was created last summer.
• They all join the firm from Bryan Cave Leighton Paisner LLP where they were partners.
• The addition of their team continues the firm’s strategic growth with a dozen lawyers joining the Corporate practice in the past year.