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Clifford Chance

Clifford Chance


Administrators and the UK Coronavirus Job Retention Scheme

14 April 2020

In these exceptional times, a decision handed down In the Matter of Carluccio's Limited (in administration) [2020] EWHC 886 (Ch) this Easter Bank Holiday Monday will be welcomed by many. It enables the administrators of Carluccio's to implement their proposals to furlough most of the company's employees with less concern that they might be criticised at a later date for trying to do the right thing. It may have wider implications for businesses operating in similar circumstances and 'would be' administrators who might be inspired by the court's pragmatic approach to the novel and urgent situation. In this case, it was also recognised that, wherever possible, the courts should work constructively together with the insolvency profession to implement the Government's unprecedented response to the Coronavirus pandemic. In doing so, the court also underlined the fact that the rescue culture embodied in the administration process and envisaged by the insolvency legislation should be given effect and interpreted in such a way as to deal with the economic consequences of the Coronavirus pandemic. It ought to be recognised, however, and as expressed in the judgment itself, that the decision and directions will not be binding on affected employees or the Government (or indeed in relation to other cases), who could take issue with the decision at a later date. Nevertheless, the guidance and approach of the court offers reassurance that courts will adopt a pragmatic approach when dealing with the extraordinary situations caused by the Coronavirus pandemic.

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