Virgin Atlantics rescue deal is something of a watershed in how companies can escape insolvency. The deal, which will involve Richard Branson and US hedge fund Davidson Kempner Capital Management injecting US$1.6 billion (1.2 billion) into the airline, uses the new restructuring plans made possible by the UK Corporate Insolvency and Governance Act 2020.
While most creditors have accepted the rescue deal, the approved restructuring plan will also bind those who are against it. The UK procedure has also been recognised by a court in New York so it protects Virgins American assets as well as its British ones.
The new Act is quite a shift from the old UK insolvency rules. Theres always the need to find a trade-off between protecting credito…
Read the full article at: https://theconversation.com/uks-new-insolvency-process-should-worry-company-creditors-around-the-world-138465
