Building on the successes of the first three conferences, the Insolvency Service held its "Forward Thinking" conference in April 2025. The organisers invited academics and practitioners to submit papers in advance. From the shortlist, the organisers selected a handful of the authors to present their papers at the conference.
The content of the papers, and the debate generated at the conference, will hopefully help the Insolvency Service in terms of selecting and crafting new legislative initiatives, going forward.
Highlights included:
Special Administration Regimes (SARs)
- We currently have 18 standalone SARs on the books. It was suggested that consideration should be given to having one single overarching SAR, with just modest adjustments for different sectors.
- Sectors without an SAR currently (but for which SARs would be useful) include universities, airlines, and healthcare.
- An SAR is a form of "temporary nationalisation", paid for by the taxpayer. When a company prospers, the shareholders benefit; when a company struggles and falls into an SAR, the taxpayer bails it out. Is this fair? Why not have an industry levy (payable in the good times, along the lines of ABTA and the pension protection fund) to call upon when funding through an SAR is required?
Out of the money creditors in restructuring plans
The European approach to restructuring plans is that, for policy reasons, it is preferable for all creditors (if they so wish) to be entitled "to have their day in court" (i.e. have a right to be heard on the plan). This is not a right to veto, but a right to be heard. It was suggested that a similar approach should be adopted in the UK for restructuring plans.
On the one hand, introducing such a right would risk the process being more costly. However, on the other, there are significant societal benefits. In particular, the court considering a plan will have the benefit of getting a wide range of views, and the inclusivity adds to the perceived legitimacy of the procedure.
Restructuring plans and landlords
This issue prompted lively debate.
A landlord always has a right to take its property back if it doesn't like a proposed or approved restructuring plan. If it elects not to do so, the assumption must be that, for the landlord, the plan is preferable to testing the lease in the open market. It was therefore suggested that, consequently, so long as a landlord has the right to take the property back, its right to challenge the plan should be limited.
A contrary view expressed by one of the academics presenting was, however, that the Practice Statement needs to be amended to mandate negotiation milestones within the restructuring plan process.
Conclusion
It remains to be seen if, and how, these topics will be addressed by the Insolvency Service and/or the Government. However, it is a useful indication of the key insolvency issues at present. It is perhaps unsurprising that restructuring plans and special administration regimes are of particular concern given the high-profile Thames Water restructuring. It will be interesting to see whether this prompts changes to what is still a relatively new and evolving area.