New UK insolvency law puts secured creditors in the firing line, Travelodge to be first test

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By Owen Sanderson
21 May 2020

The new UK insolvency law, introduced into the British parliament on Wednesday, will allow unconsenting creditor classes, including secured creditors, to be crammed down during a restructuring. This could mean bondholders and banks, rather than landlords, take more of the pain in the coming wave of corporate distress. Hotel chain Travelodge is likely to be one of the first major companies to use the new rules.

The UK government has been rushing forward reforms to insolvency rules, hoping to suspend directors’ duties around wrongful trading for the period from March to June.

But the government also announced that it would take the opportunity to push through reforms first proposed in 2016, which had stalled ...

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