Choppy waters ahead? The significance of Oceanfill

The economic outlook for the UK in 2023 remains uncertain, and more companies may need to restructure their businesses to ensure survival.

This may involve looking to restructure rental liabilities through compromise arrangements, such as a Company Voluntary Arrangement (CVA), scheme of arrangement, or restructuring plan. The restructuring plan, which was introduced to UK insolvency law nearly three years ago, has been viewed as an effective addition to the rescue toolkit, particularly with the cross-class cram down provision. However, the process can be too costly and time-consuming for smaller companies. The recent sanctioning of the restructuring plan for Houst Limited may make the process more attractive for SMEs. CVAs remain a compromise tool of choice for many companies, but they have challenges, and their role may be less prominent than in recent years. Restructuring plans may feature heavily in the property market in 2023, particularly in light of the approach of the court in the Houst case. The recent case of Oceanfill Limited v Nuffield Health Wellbeing Limited, Cannons Group Limited [2022] EWHC 2178 (Ch) may have important implications for future restructuring plans proposed by, or affecting, tenants, landlords, or guarantors.

Read the latest article from Elizabeth Alibhai, Paul Bagon and Will Beck in R3 magazine.