James Roome Quoted in The In-House Lawyer on New UK Corporate Governance and Insolvency Act
Akin Gump financial restructuring partner James Roome has been quoted by The In-House Lawyer in the article “Eye of the storm,” which looks at the U.K.’s Corporate Governance and Insolvency Act that was passed earlier this year. The stated purpose of the legislation, according to the article, is to give companies affected by the pandemic or by Brexit the tools they need to survive a mounting debt or liquidity crisis.
According to Roome, the act is “a much more significant departure as a matter of English law than some people appreciate.” It singles out the suspension of termination on insolvency supply contracts as a particularly useful measure for assisting companies in conserving the value as a going concern, he said. In addition, “The ipso facto protection, where certain suppliers will not be able to terminate their supply contracts based on the granting of a moratorium or the making of administration orders, is very helpful and something that will undoubtedly help companies.”
The new law, though, is no silver bullet to solving the U.K.’s impending insolvency crisis, said Roome. He also believes the legal provisions already in place were sufficient to cover the majority of restructurings. “Since the dramatic increase in going-concern debt restructurings that happened in the early 2000s,” he said, “English law has emerged as a tool that has allowed a huge number of consensual restructurings to be achieved for large and multijurisdictional companies.”