The High Court in London Hanger Lane Ltd [2020] EWHC 1191 (Ch) has confirmed that security documents registered at Companies House containing incorrect cross-references should be construed as providing the correct cross-reference, without the need for rectification by supplemental documents or additional filings.

The background facts of the case changed the whole outlook and the Court noted that, had it not been prepared to declare the above, it would have granted relief by rectification in any case.

The outcome of this case serves as a reminder that mistakes in security documents, however small, can be expensive to remedy given the time and costs incurred in considering how to correct this error.

The Corporate Insolvency and Governance Bill

The new Corporate Insolvency and Governance Bill (the “Bill“) has been introduced into the UK Parliament and proposes significant changes to insolvency law, including:

• that companies will be able to trigger a standalone moratorium on enforcement actions; and
• the introduction of the “restructuring plan” which will be a new mechanism for companies to compromise their obligations to creditors/members.

The Bill also seeks to introduce temporary changes which are intended to provide a measure of protection to companies during the COVID-19 pandemic. For example, the Bill includes a prohibition on winding up petitions being presented by any creditor on or after 27 April 2020 on the basis of a statutory demand served from and including 1 March to one month after the Bill.

In recent years, we have seen companies in financial distress using insolvency procedures (such as schemes of arrangements and company voluntary arrangements (CVA)) to make proposals to creditors to compromise existing obligations.

Such restructuring plan offers more flexibility to companies that sponsor defined benefit pension schemes to compromise their obligations to creditors and, potentially, to the pension scheme itself.