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Covid clauses not cutting the mustard - news article image

Covid clauses not cutting the mustard

17 Jan 2022

2 minute read

In the weeks leading up to Christmas, England was placed into what can only be called a non-official lockdown. It was a lockdown in all but name, and left many industries, but primarily the hospitality industry, with countless cancellations yet without additional financial support.

Hospitality UK reported that many businesses lost 40-60% of their December trade, often their most profitable month. It was not until 21st December that the Chancellor announced that there would be support, but it seems to many to have been too little too late. It was very early in the New Year that the liquidation of the first high profile restaurant chain was reported. Are there many more to come? 

So what does this mean for commercial tenants and landlords?

It has recently become apparent, despite carefully negotiated agreements between landlords and tenants over the last 18months or so, that Covid Clauses do not have the impact desired by tenants. Reports of rapid increases in rates of infections, particularly in city centres, have proved to be enough to halve revenues for many businesses but do not allow Covid clauses to kick. 

So what of the impending lifting of the moratorium and the Government arbitration process to be used? Is it already out of date and in need of revision? More pressing is the question of whether tenants can pay their rent? A major stumbling block possibly for business that have only just started to get back on their feet, and for landlords with ongoing obligations. Will this further impact the confidence of lenders?

Hayley and I have continuously, from the onset of the pandemic, assisted landlords and tenants to find a workable agreement to keep the businesses viable whilst achieving the best position possible for the landlords. 

How Shaw Gibbs can help? 

Shaw Gibbs has two Insolvency Practitioners and a large, experienced team in position to help in all situations that involve or touch on insolvency or corporate recovery. We also have the back up of one of the largest accountancy and business advisory practices in the Thames Valley, with an office in London, to help advise business on a whole host of matters including; tax planning, accounts and audit, corporate finance, and financial planning. Furthermore, Shaw Gibbs' membership of the DFK international association provides further support in cross-border situations with different jurisdictions. 

Our Insolvency Practitioners always take the time to understand individual circumstances to ensure the right advice is given.

Covid clauses not cutting the mustard - news article image

Author:

Karyn Jones

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