The present regime has led to much criticism regarding sales to connected parties/ management. Detractors believe the pre-pack administration sale lacks transparency leaving creditors dissatisfied and with feelings of being ‘stitched up!

The creation of a ‘pre-pack pool’ in 2015, whereby the purchaser of the business and/or assets and particularly those falling into the ‘connected’ category voluntarily had the proposed sale reviewed by an ‘independent body of experienced business people’ was hoped to provide reassurance.

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Prior to the coronavirus pandemic, the UK high street was already facing uncertainty as a result of volatile trading conditions, with many household names either totally disappearing from the high street or having to go through some form of restructuring resulting in several store closures and redundancies. Although there are a few reasons as to why certain retailers were struggling, it ultimately came down to a decrease in sales volume, with fewer companies reporting signs of growth.

If you take into consideration the changing habits of consumers who had started redirecting their spending on other sectors such as leisure and travel, and engaging in the increasingly popular phenomenon of online shopping, it is no surprise why many retailers started to genuinely worry about the future. Of course, in an ideal world, these retailers could amend their business model to target a new generation of consumers, whilst offering something unique in the overall shopping experience to its existing customer base to revive their sales volume. However, we do not live in an ideal world and the harsh reality is that the high street could be facing an even more uncertain future as a result of the lasting effects from Covid-19.

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With the ramifications of the coronavirus pandemic impacting the UK economy in a number of ways, the UK government has introduced several extraordinary measures designed to support UK businesses and to keep the economy as far away from recession as possible during these unprecedented times. Whether this has been from the introduction of the furlough scheme to the more recent ‘Eat Out to Help Out’ initiative, it is evident that the impact of Covid-19 has meant that the government’s reaction and budgetary strategy to the pandemic is unsurprisingly under the microscopic eye more so than ever before.

One of the more conspicuous schemes which attracted headlines was related to the deferral of VAT payments which would have normally been due between March and June this year. Those payments can now be deferred until the end of the 2020/21 tax year and this will have certainly aided businesses to manage their cash flow by providing them with, what is effectively an interest-free loan facility. Despite the government's best efforts to ease the burden on businesses affected by the pandemic, and despite praise from several business figures, there remains criticism from businesses up and down the country of the government’s overall strategy in helping businesses stay afloat.

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Following PCR’s most recent article which looked at the devastating impact the coronavirus pandemic has had on the UK hospitality sector, it is evident that one of those segments within the industry - the hotel sector, is on the verge of facing one of its biggest shake-ups in recent years.

An example of this is the ongoing dispute between budget hotel chain Travelodge and its landlords which have a history of disagreements ever since Travelodge was saved from administration back in 2012. However, it appears that with all the apparent strides Travelodge has made since those troubled times eight years ago, the coronavirus pandemic has almost sent the company back to square one, with its debt burden swiftly pushing the business to the brink. Landlords in the meantime have always felt that they have had the short end of the stick and this time it is no different as affected landlords were asked to take an 80 percent reduction in 2020 rent and a 50 percent reduction in 2021, later reduced to 38 percent rent cut across 2020 and 2021. This certainly appears to have been a case of “the straw which broke the camel’s back”, with the complex rules of a Company Voluntary Arrangement (CVA) meaning that in effect – landlords can be forced into accepting a deal that they do not want. At the same time, other creditors can also outvote them because the banks are owed more than the total of unpaid rent.

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After months of economic uncertainty, there is little doubt that the coronavirus outbreak has had a crippling effect on businesses up and down the country. The impact of the pandemic has affected organisations from a variety of sectors such as retail, transport, education, manufacturing, health and beauty and the tourism industry to name a few. However, it is also evident that certain industries have been affected more than others. One of those business sectors severely impacted by the lockdown and which has felt the full impact of Covid-19 is the hospitality industry.

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