22 June 2021
R&I update – July 2021 – 1 of 6 Insights
On 16 June 2021, the UK government announced that:
The extensions apply to all businesses, but the new legislative measures will only cover those impacted by closures. This means that rent debt accumulated before March 2020 and after the date when the trading restrictions on a particular business were lifted, will be actionable by landlords as soon as the tenant protection measures are lifted (from 1 October 2021 for winding up petitions and from 26 March 2022 for forfeiture).
Certain insolvency measures have not been extended:
The government hopes these measures "…strike the right balance between protecting landlords while also helping businesses most in need" and is keen to make clear that businesses who are able to pay rent must do so.
Different stakeholders will have different views on whether the right balance has been achieved. It remains to be seen whether the desired consensual agreements between landlords and tenants will be facilitated or whether the extensions will encourage unviable businesses to continue to accumulate unpaid rent (and other debt) and avoid an insolvency or restructuring process.
To discuss further, please reach out to a member of our Restructuring & Insolvency team.
by Mark Chan