TMA UK Manchester event 26 April 2023
Based on a TMA Roundtable “Flying in a Perfect Storm”, this panel event is the first in a series looking at the outlook for the North West. Kindly hosted by Gateley Legal in association with BZ Trusted Debt Capital, this event highlighted the challenges for Directors pursuant to their duties and the current challenges with HM Revenue & Customs (HMRC).
The panel of Andrew Buchanan (Gateley Legal), Frank Ofonagoro and Mark Hendrick (both Quantuma) started by discussing the current state of play for the restructuring and insolvency market which is that there has been a post COVID uptick in work but was still not back to pre-pandemic levels.
Frank confirmed that he was seeing a number of profitable businesses that were burdened by COVID debts and he was keen to see HMRC become part of the solution, but the lack of commerciality was preventing this. In fact, Mark commented that HMRC have become more aggressive by not extending time-to-pay arrangements and issuing winding up petitions, creating more work for industry but also that the aggressive stance was preventing the rescue of some good businesses. Andrew stated that the government had funded companies through COVID but was now helping them to failure.
When asked whether we would see more Administrations because of the preferential status of HMRC, Frank was of the opinion that it should on the face of it but actually what he was finding was that lenders were more open to giving time to the borrower rather than taking a more aggressive stance as the recoveries for preferential creditors was actually focusing the mind more on longer term solutions for lenders.
Andrew finished the meeting by providing an insight into Directors’ duties and that they were a significant part of the work currently being completed by restructuring solicitors, particularly being mindful to connected party transactions as part of a pre-pack Administration sale. He outlined that HMRC had more duties now to pierce the corporate veil and also highlighted S754 of the Companies Act and the duty floating charge creditors have to preferential creditors assets.
The panel session ended with an update on the interesting Sequana case and the impact of that on Directors’ decisions.
Many thanks to Andrew, Frank, Mark, Gateley Legal and BZ Trusted Debt Capital for their time and support.