When not managing a practice as an Edwin Coe restructuring and insolvency partner, Simeon Gilchrist sits as a council member of R3, the Association of Business Recovery Professionals, and has a particular interest in the niche businesses that form the Smaller Practices Group.
The events of the last few days are unprecedented in peacetime. Measures put in place by government to shore up business must now be matched by competing elements of the economy itself.
Ten minutes spent on the GOV.UK page provides a rude introduction to the seismic shift in the economic life of the country that has seemingly happened overnight: COVID-19: support for businesses
The business rates holiday; VAT and income tax deferrals; an employee “furlough” scheme; a grant for small businesses; and an apparent SME loan scheme for business.
There is however a crucial element to the rescue package that is missing at this time for most businesses, and in particular for leisure and hospitality businesses. Rent. The quarter day is upon us, and although it might be said that there are as many different types of commercial landlord as there are tenant, there is a special place held in the heart of the law for real property owners, and this may play a part in the landlords’ reaction to their tenants’ most immediate plight.
How will the landlords’ umbrella associations respond? How are they able to encourage their members, still less landlords who are not members, to follow government’s lead and allow businesses themselves to ease into hibernation until the present danger passes? Institutional landlords often lean on their position as the nation’s pension providers. Will those long term concerns be balanced with the risk of multiple industry wide breaches of covenant on Wednesday?
To discuss any part of this blog in further detail, contact Simeon Gilchrist, who is working from home.
For insolvency practitioners looking for useful resource pages, first stop: R3’s website
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