Corbin & King vs Minor​

By Jake Rickman​

What do you need to know this week?

Restaurant group Corbin & King successfully parried away a High Court challenge brought on by one of its shareholders, Minor International.

Corbin & King owns and operates some of London’s most revered restaurants, including The Ivy and The Wolseley.

Minor International is a hotel operator based in Thailand.

The dispute began during the initial stages of the pandemic when the restaurant group struggled with lockdown measures and declining customer footfall at its central London locations. According to the claim brought by Minor, it had tried to inject financing into the company. The group’s CEO, Jeremy King, rejected the offer.

As a result, Minor appointed administrators with the intent to institute a “recapitalisation”, which refers to a process of injecting money into a company to rescue it from insolvency.

Mr King alleges there was never any need for the recapitalisation.

Why is this important for your interviews?

An “administration” is one of several ways for a company’s stakeholders, including its creditors and shareholders, to intervene in the affairs of a company that arguably cannot "continue as a going material concern”. This is a legal definition for a company that cannot bring in enough money to satisfy its debts.

Administrations are commonly brought as an alternative to “liquidations”, which you might think of as the legal equivalent of a corporate euthanasia: if the court is satisfied that the company cannot continue as a going concern, it can order the company to be “wound-up”. This means that a liquidator is appointed to pay off the creditors according to the “order of priority”, which is based on the strength of their security in the company’s assets.

From the shareholders’ perspective, rarely is there a substantial amount of money left for them in a company put through liquidation, which is why this is a remarkable case. What interest does Minor have as a shareholder?

We can only speculate about Minor’s true position in Corbin & King: they may have owned “senior secured” debt in the company in addition to being a shareholder, which would put them in a more competitive advantage had an administrator been appointed.

Ultimately, the High Court judge refused to authorise the petition, suggesting the facts agreed with Mr King.

From an interview perspective, the dispute between Corbin & King and its majority shareholder presents an opportunity to explore the legal and commercial elements of restructuring and insolvency, which can be fascinating, if opaque.

How is this topic relevant to law firms?

Restructuring and insolvency is an area of law where transactional and contentious matters fuse into one: for example, a court has certain powers to require creditors and shareholders to agree to the terms of a proposed transaction.

This can create situations where stakeholders that disagree with a proposed resolution to a potential insolvency outcome are nonetheless forced by the court to accept the terms of the agreement. This requires practice groups skilled in both contentious and transactional matters.