BPF Spotlight Series: Restructuring Plans (RPs)
đź’ˇ Our latest BPF Spotlight is officially out - this week focussing on Restructuring Plans (RPs)!
In the spotlight, Adam talks us through the concerns around fairness and transparency, how the current process could be improved and what the BPF is doing to advocate for reform. With a new court practice statement on the way and a dedicated event this September, now’s the time to get informed on how RPs are evolving and what it means for the property sector. Let’s get into it 👇
❓ To kick us off, what’s the background on RPs?
🗣️ RPs were introduced in 2020 as a stronger alternative to company voluntary arrangements (CVAs). But like with CVAs previously, we’ve seen many retail and hospitality RPs seeking significant rental cuts and changes to other contractual terms.
âť“ What are the main issues around RPs?
🗣️ Fairness is a big issue. Property owners see rent cuts, but then don’t benefit from the upside. Yet company owners often see significant value released within their restructured holdings.
The overall process is an issue too. We need genuine transparency of information so property owners can fully evaluate and properly challenge plans. Proposing companies need to be required to release information, as that would help reduce the adversarial and expensive nature of the court process.
Taxpayers also lose out because business rates are frequently compromised, and it also affects the sector’s ability to invest in high streets.
âť“ What work are the BPF doing on this?
🗣️ We’re currently lobbying for the reform of RPs. We recently submitted a response to the Judiciary’s consultation on the new practice statement, which is an important opportunity to improve the process – something judges are keen to do. Our Insolvency Committee members also actively engage with companies proposing RPs and CVAs to improve them pre-launch.
❓ I heard we’re holding an event all about RPs soon – can you tell me more about it?
🗣️ Together with Hogan Lovells, we’re assembling an expert panel on 11 September to understand and discuss the latest developments around RPs. We’ll explore how recent judgements, such as Thames Water and Petrofac, will affect RPs for landlords and tenants going forward, including how the restructuring surplus should be shared. The new practice statement is due to be published, so there’s definitely a lot to cover.
