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28 November 2021

Opinion from Adrian Leopard & Co

News impacting business from Adrian Leopard & Company - Insolvency Practioners & Mediators

Leopard News

Following successful court case, insurance companies still reluctant to pay out on Covid-19 business interruption claims

Following successful court case, insurance companies still reluctant to pay out on Covid-19 business interruption claims

It is not unknown for a party to win a case but still feel he has lost it. Covid-19 business interruption claims must surely fall into that category

It is a real blow for some hoteliers and other hospitality operators but although there were insurance claims for business interruption, insurance companies fell over themselves to avoid making payouts, claiming that the cover did not extend to such exceptional circumstances or that the wording did not cover the present situation etc.

Christmas and New Year are over. Now into the bleak mid-winter?

Christmas and New Year are over. Now into the bleak mid-winter?

2021 is going to be a very hard year for the hospitality industry; there is just no indication of when things could start to improve

As we all know, December is generally one of the best months of the year for trade in the hospitality industry. People all have their office Christmas parties and over Christmas families go out drinking and eating and at new year, yes getting well oiled is definitely the order of the day.
As we see light at the end of the tunnel, society will start to re-evaluate itself.

As we see light at the end of the tunnel, society will start to re-evaluate itself.

When we go outside and the real light dawns when the pandemic is over, we are in for a big shock.

Since the beginning of the restrictions and the first lockdown, huge amounts of things have changed in the economic field. Many businesses have suffered terribly by being closed, most especially the hospitality industry and of course some businesses have done very well and others have even prospered beyond belief because of Covid-19.
Is Covid-19 the nemesis of our ultimate downfall?

Is Covid-19 the nemesis of our ultimate downfall?

As more people go into high states of lockdown, will the people obey?

As October draws to a close this weekend I cannot help but feel that this has been a depressing month so far as Covid-19 news is concerned and I do not cease to amaze at the attitude of some people, mostly younger but not all, whose approach is that they cannot cope with more restrictions and therefore they are going to ignore them.
Anger increasing; differences widening. How do we come to a consensus?

Anger increasing; differences widening. How do we come to a consensus?

As the country closes down bit by bit, arguments rage on. How are they going to be resolved?

Ever heard of the expression “ever decreasing circles”? Well if there were ever a time when that applied it is now. As if we did not have enough trouble fighting a hidden virus which is over-taking our society, people are now getting more and more angry and starting to argue. And what is it about? Not the virus really but money.
What will be the ramifications of working from home?

What will be the ramifications of working from home?

Will society become less “social” or is this just a relatively short term aberration?

A lot of people have grumbled about the U turn by the government concerning going back to work. Having been told to work from home if at possible, the government then decided to try and get people back to work if at all possible. Then the spread of the virus got worse and the instruction was reversed.
Possession proceedings for commercial premises – there are two sides to every story – and there could be quite a few sides

Possession proceedings for commercial premises – there are two sides to every story – and there could be quite a few sides

Perhaps landlords and tenants should think about mediation before embarking on the litigation route to resolve their differences

As the pandemic rolls on, the cries are getting louder for the government to extend the moratorium in respect of possession proceedings for commercial premises where rents are in arrears due to coronavirus. One hospitality business association is now saying that if the moratorium is not extended the government will face a “bloodbath” of business failures.
Financial pressures are going to start to build up, notably in hospitality

Financial pressures are going to start to build up, notably in hospitality

The shock of battening down the hatches has not yet dawned

The hospitality industry is likely to be facing increased financial pressure over the forthcoming weeks. The industry has found itself in a unique position having been more or less closed down in March. We are now beginning to see the premises which have not re-opened since the lockdown was relaxed and which are beginning to announce that they will not re-open, at least under the same ownership.
To discount or not to discount – that is the question

To discount or not to discount – that is the question

Eating out always has been a caveat emptor issue but more so than ever at the moment!

The chancellor’s eat out to help out scheme is now closed. Considering the novelty of the idea when it was announced, it does appear to have been an incredible success with some restaurants saying they have never had a busier August than this one. The scheme has cost a great deal of money with well over 64 million meals being sold.

Discount meal scheme to be continued by some venues into September

Discount meal scheme to be continued by some venues into September

Enjoy cheaper food while it lasts – September probably heralds something different

The chancellor’s eat out to help out scheme has one further day to run after today, next Monday which is a bank holiday. Although there have been calls for the chancellor to extend his scheme this has not been done and it would be surprising if it were given that the ball is being picked up by others.

Turnover based rents – could this be the way forward for the future in hospitality? Could it herald the difference between survival or insolvency?

Turnover based rents – could this be the way forward for the future in hospitality? Could it herald the difference between survival or insolvency?

Whatever else Covid-19 has done, it has taught us significant lessons in relation to business matters. We need to be ready in case it happens again in the future

As things stand, a lease is not an asset – it is a liability other than in very limited circumstances. This fact has never been better known than it has during the pandemic lockdown. Businesses have had to close by government order but their rents continue to accrue and become due.
Chancellor’s give-aways. Amazing how parties can find a way to disagree! Beware the racketeers

Chancellor’s give-aways. Amazing how parties can find a way to disagree! Beware the racketeers

Disputes now over even how help is supposed to be managed

When the Chancellor of the Exchequer announced his mini-statement a week ago, generally public opinion seemed to be almost wholly in favour. We were being offered £10 a head to eat out on certain days in August and a reduction in VAT for the hospitality industry for six months to January – all to give the industry a well-needed shot in the arm for its very survival.

Reservation deposits – blessing or curse? But what about the empty chairs and empty tables? And how would you feel if you discovered your pilot did not have a licence to fly the aircraft?

Reservation deposits – blessing or curse? But what about the empty chairs and empty tables? And how would you feel if you discovered your pilot did not have a licence to fly the aircraft?

Is the trust we place in our regulators justified? Pakistan CAA clearly has egg on its face

It is probable that the general public have little clue about the damage that no-shows can cause to restaurants and hotels. Unfortunately, this is not just an occasional problem but might almost be said to be endemic. What is difficult to know for certain in why no-shows take place and probably everyone has done it at some time or another, even if only because one of the party does not feel very well
Week started badly for business and gets no better, especially in aviation and hospitality

Week started badly for business and gets no better, especially in aviation and hospitality

Of course airlines may be closed down again if virus continues to spread at current rate

Today is the day that Ryanair has started its 1000 flights a day. That plan suffered a minor blow when Greece said not yet please but nevertheless Mr O’Leary claims that their flights to other destinations are 70% full. By clicking on this link you can see what flights are in the air and the Ryanair flights have RYR at the beginning of the ID.
Are you afraid of a second wave? You probably should be. Get that face mask on

Are you afraid of a second wave? You probably should be. Get that face mask on

As new cases exceed 10 million this pandemic is on the increase!

By the end of the coming week, we shall have seen major new relaxations of the social-distancing requirements. Pubs and hotels are re-opening and we shall see a further week of unlimited shopping. The following week travel opens up again and we hear talk of the quarantine measures being relaxed for certain low-risk countries.

Corporate Insolvency and Governance Act 2020 is now law – and Lufthansa update

Corporate Insolvency and Governance Act 2020 is now law – and Lufthansa update

New insolvency law now in operation and Lufthansa hanging in there!

The Corporate Insolvency and Governance Act 2020 completed its whistle-stop tour through Parliament yesterday, notwithstanding a number of amendments in the House of Lords, and received the Royal Assent yesterday evening, 25th June, and therefore became law at midnight last night.
Will your local pub re-open as a going concern? What if it doesn’t?

Will your local pub re-open as a going concern? What if it doesn’t?

Opening up again after the relaxation of the lockdown is very much a two sided exercise

Crunch time looks like being upon us in the next fortnight. Pub landlords will be now be assessing what they can and cannot achieve. Probably the public will think mainly in terms of what matters to them, things like will there be adequate space for social-distancing
Corporate Insolvency & Governance Bill – a quick update. Can it help you?

Corporate Insolvency & Governance Bill – a quick update. Can it help you?

Daily we hear about more insolvency in business, notably in the hospitality industry. Now is the time to think about whether you may be in trouble.

This bill is due to have its committee stage in the House of Lords today, 16th June. It is understood that there will be some debate and if amendments are made it will have to go back to the House of Commons. Otherwise it can be expected to move forward to Royal Assent pretty quickly.

Is British Airways really not allowed to manage its affairs to its advantage? Who next?

Is British Airways really not allowed to manage its affairs to its advantage? Who next?

Businesses are now fighting for their very survival. Without them there will be no jobs.

“No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores…..” So said
Zoos and safaris – just social distancing collateral damage while radical protestors get away with it?

Zoos and safaris – just social distancing collateral damage while radical protestors get away with it?

There seems to be a lack of rational thinking in the way social distancing is imposed.

In a world where we have become more aware of the need to protect endangered species, our zoos have become really important centres which can do so much to assist in this endeavour. It is always encouraging to hear of the births of rare creatures in zoos and to know that animals that are endangered in the wild still have cousins in captivity – and captivity also means safety and protection.
Specialist Leisure Group goes into administration including some well-known names.

Specialist Leisure Group goes into administration including some well-known names.

Names like Shearings, National Holidays, Bay Holidays and many others included.

On 22nd May the Specialist Leisure Group entered into administration. It was reported on television but certainly the impact of this collapse was not evident. One of its subsidiaries is Shearings the coach company and that broadly is all that was reported.
New insolvency legislation now laid before Parliament. If you have an ailing business this could be very important for you.

New insolvency legislation now laid before Parliament. If you have an ailing business this could be very important for you.

The Corporate Insolvency & Governance Bill has now hit the Commons with more than was expected.

The Chancellor of the Exchequer announced early in April that there would be temporary relaxations to the current insolvency legislation specifically over the issue of wrongful trading. Since that announcement all sorts of other pressures have surfaced and the government has taken the opportunity of trying to address some of them.
Who does Heathrow really belong to? CO2 lobbyists back on the job!

Who does Heathrow really belong to? CO2 lobbyists back on the job!

As we move towards relaxing the restrictions, parties begin to think of the future.

Whether you like it or not, Covid-19 is being seen by climate change lobbyists as their “opportunity”. In a previous post, I looked at the effect several factors might play in deciding whether Heathrow Airport (LHR) would get its controversial third runway in the foreseeable future.
Aviation in dire trouble – will it ever be the same again? And what about your holidays this year?

Aviation in dire trouble – will it ever be the same again? And what about your holidays this year?

Do people have a clue just how bad it is?

Current news on aviation is dire. British Airways have announced a possible 12000 redundancies will be taking place and now it is looking like Gatwick will lose all BA activity and BA are telling us that it may not start up again. The job reductions include significant numbers of pilots and co-pilots.
I have paid a deposit for my daughter’s wedding reception. It’s safe – right?

I have paid a deposit for my daughter’s wedding reception. It’s safe – right?

No obligation to hold deposits in ring-fenced accounts.

One of the worries which is emerging as a result of the lockdown is a complex area of business which many people find catches them out. That is the payment of advance deposits to make bookings and this is not just for wedding receptions but throughout modern life, and most notably with your deposits for package holidays and airline tickets.
South African Airways – just furloughing or closing? For airlines will it be like escape from Alcatraz?

South African Airways – just furloughing or closing? For airlines will it be like escape from Alcatraz?

Government not giving financial aid

South African Airways joins the ranks of airlines with a doubtful future in announcing that it is laying off all of its 4700 employees at the end of April. However it sounds a bit more than furloughing with the employees being given a severance package roughly equivalent to one week’s pay for each year of service although even that is conditional on a successful disposal of certain other assets.
We have a mortgage moratorium; what about business rents?

We have a mortgage moratorium; what about business rents?

The big question is where will the buck stop?

Managing the cash crisis during the lockdown is certainly no easy task. Government funding to pay people’s wages and salaries, rates holidays, a moratorium to block commercial evictions and so forth are all welcome shots in the arm. However, what has not yet become protected is what will happen to businesses which cannot pay their rents.
Organisations develop systems to keep working

Organisations develop systems to keep working

Ingenuity emerges in true British fashion but does this herald permanent change in our society?

The first three weeks of lockdown will soon be over and there is little doubt that we can then look forward to probably another three weeks and no doubt many months of further restrictions of some sort or another. Anyone who thinks this will all be over in a week or so is surely in cloud cuckoo land.
Chancellor announces changes to insolvency rules to get business through.

Chancellor announces changes to insolvency rules to get business through.

Do the public really understand what relaxing the wrongful trading provisions will mean? What if you are a creditor?

Time marches on and we see innumerable changes in the way government is managing our society. One area of change includes some changes in the insolvency regime to assist businesses in trouble. These include relaxing the wrongful trading rules for a period of three months.
What is the future of hospitality in the UK?

What is the future of hospitality in the UK?

Turmoil for hotels, pubs and restaurants as the lockdown continues, and are the government handouts based on profits going to solve the problem?

The UK hospitality industry lives permanently on the edge. It has always been highly competitive and making a profit is by no means guaranteed. With the compulsory closure of hotels, pubs and restaurants, the country should be prepared for a very different view of the industry when the lockdown is over.

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