26a: Winner of the Orange Award for New Writers

Product Information

Therefore, the costs and fees associated with a Part 26A Plan are more extensive than other restructuring or refinancing options. The court has the power to stay proceedings any creditors may initiate in the interim period before the convening hearing. The court will consider whether the extension is in the interests of the pre-moratorium creditors and whether the court considers that the rescue is likely.

Whilst at the current time creditors are generally exercising forbearance, this will not continue indefinitely, particularly as the lock down eases. However, Leech J concluded that Snowden J had not intended to lay down a rigid rule and there may be circumstances in which creditors without a genuine economic interest in the company may nevertheless have a legitimate interest in opposing the plan (see [97]-[100]) (although he did not consider the plan to be unfair to such creditors in the present case: see [120]-[121]).That is defined as the earlier of September 30, 2020 and the last day of the period of 12 months immediately following the end of the relevant accounting reference period. The moratorium procedure is another tool that can be used to help rescue companies and avoid insolvency. Extract the zip files and add the records for Non-Deduction or Non-Collection in the extracted CSV files with the relevant details. A Part 26A plan is only available to companies seeking to reduce the ability of a company facing serious financial difficulty to “continue as a going concern”. Challenges to actions of a monitor can be brought by an application to court by a creditor or anyone affected by the moratorium on the grounds that an act, omission or decision of the monitor has caused unfair harm.

If your business is facing an insolvency or restructuring proposal, you may be a party to a Part 26A restructuring plan.The company may borrow and incur credit provided it discloses that there is a moratorium, and it may grant security over property provided that the monitor consents. These temporary provisions are intended to ensure that companies and other qualifying bodies are able to hold AGMs and other meetings in a manner consistent with the need to prevent the spread of the coronavirus. In this sense, the purpose of a stay is to expedite the restructuring process and maximise the outcome for all the stakeholders. A “going concern” is a broad legal and accounting term that refers to a company’s ability to trade and meet any obligations it owes its creditors. Where such an election is made, the employee will only pay tax on their foreign earnings to the extent that they are remitted to the UK.