IMPORTANT UPDATE: COVID-19

In our blog of 24 April we reported on the Government’s press release announcing measures to protect companies and commercial tenants from aggressive rent collection by their landlords during the Coronavirus pandemic.

Now, nearly a month later, the Corporate Governance and Insolvency Bill has been presented to Parliament. The length of time that it has taken and the length of the Bill – some 47 sections and 14 Schedules – gives some idea of the complexity involved, but this is going to be important legislation for debtors, creditors and directors, with provisions on arrangements and reconstructions for companies in financial difficulties, winding up petitions, wrongful trading and the governance and regulation of companies.

Included in the Bill are provisions:-

  • To give struggling businesses a 20-business day opportunity to consider a rescue plan, extendable by the directors for a further 20 business days or with creditor consent for up to a year.During the moratorium no legal action can be taken against a company without the leave of the court.The process will be overseen by a monitor who must be a licensed insolvency practitioner.
  • To introduce a new Restructuring Plan to allow struggling companies or their creditors or members to provide an alternative rescue option for companies that are suffering financially
  • To void statutory demands issued between 1 March and 30 June 2020
  • Restricting winding up petitions from 27 April to 30 June 2020
  • Relaxing the threat of personal liability for wrongful trading by company directors while they continue to trade during the initial period of the coronavirus pandemic
  • Temporarily allowing companies that are under a legal duty to hold an AGM or GM to hold the meeting by other means

CONTACT US

For more information on the issues covered in this article, please get in touch with our Commercial Dispute Resolution team by calling 01484 821 500 or email info@ramsdens.co.uk to speak to a member of the team.