As promised by Mike Pavitt and Chris Parsons in their recent blog post “COVID-19 and corporate restructuring & insolvency – week 4“, it is time for a slightly different perspective from our Corporate Restructuring & Insolvency team.
For those of you familiar with the CR&I team here at Paris Smith, I am sure you will quickly identify that I am a new face in the team. By popular demand, I transferred in from the firm’s Family department earlier this week, to undertake the second part of my training contract on my road to qualification as a solicitor next year.
Like yourselves, I have, of course, read Mike and Chris’ four previous blogs from weeks 1-4 of the UK’s lockdown (and for those you who have missed them, you can catch up in the business section of our Coronavirus – legal advice and guidance page), which track how the insolvency profession has been adapting to the challenges thrown up by the current crisis.
I have for a long time enjoyed a special interest in insolvency, so I have been watching the government’s daily updates closely, anxious to see some substance behind the promises various ministers made at the beginning of lockdown, that we would see changes to insolvency law designed to help the sort of struggling businesses who have been contacting us throughout the crisis.
Like my colleagues, I have noted (with mounting frustration) a complete lack of meaningful progress in meeting these promises, as even this morning (Friday 1 May 2020) the government’s promised Corporate Insolvency and Governance Bill remains unpublished and conspicuously absent from the UK Parliament ‘Bills before Parliament’ list.
I know I speak for the entire team here in saying that pretty much as soon as we have sight of the new proposed laws we will be looking to release our provisional analysis for you so you can judge for yourselves if the substance is likely to come up to the standards of the rhetoric. In the meantime, though, I hope (if you’re still reading) you will indulge me in a personal perspective on where we are, which I look forward to discussing with any of our readers if this is of interest.
Prior to joining Paris Smith only last Autumn, I worked for a local Insolvency Practitioners’ firm as a corporate insolvency administrator, working alongside IPs dealing with the day-to-day handling of formal insolvencies, chiefly creditors’ voluntary liquidations (CVLs) and compulsory winding-ups (CWUs).
Of course, especially toward the end of my time there, those were what we would probably now call “the good old days”, when the main concern for businesses was the unknown impact of Brexit (remember that?) and the only mention of Corona was with regard to our Saturday night antics at the pub.
I hope that my insights and experiences gained from the IP’s perspective will aid the CR&I team here. Certainly, so far, it has been very interesting to see the ‘other side’ of the insolvency profession – especially in light of the new challenges we are all facing, getting to grips with rapidly changing laws and regulation, albeit as yet no formal changes to insolvency law. I have already seen very clearly how COVID-19 has impacted on business advice given to clients and the way ongoing legal matters are being managed, pursued, and settled.
As I am sure you will agree, these are very interesting times for those working in the insolvency field. The CR&I team are aware that some practitioners are already very busy, whilst others report at least an increase in enquiries. Many tell us that they have, unsurprisingly, come across directors and owners who are reluctant to take business critical decisions in respect of their companies whilst they wait for the shape of the lockdown to resolve, and whilst they are still confident of accessing government backed sources of crisis funding such as the CJRS, CBILS and the new ‘Bounce Back’ loans which many hope will help them to ‘ride the wave’. We are aware that some employers have had their Job Retention Scheme (JRS) claim for financial support refused on the basis that they are in arrears with some of their tax liabilities. This is incorrect; their claims should not have been rejected, and HMRC have asked those employers who have had their claim rejected to reapply.
Nevertheless, it appears that those working in the insolvency industry are anticipating something of a flood of new assignments from businesses and individuals as we all get to grips with the wholly unpredictable aftermath of the lockdown. I am certainly looking forward to helping companies, individuals, and IPs to access the range of solutions they will need over the coming months. I hope the message is now getting through that consulting with IPs (to whom we are more than happy to introduce people) is anything but an admission of defeat, and that in these trying times, the earlier we can signpost practical advice on options, the more likely it is that businesses which were profitable before the virus struck will be able to weather the storm and come off the sand with renewed purpose once that wave finally hits the shore.
Don’t forget, Paris Smith are fully functioning from the ‘comfort’ of our homes and are able to advise and assist you in relation to any issues you may have. Please don’t hesitate to get in touch with either myself, Mike Pavitt, Chris Parsons, or any member of our CR&I team. We would be delighted to help.