“Government gives businesses much-needed breathing space with extension of insolvency measures”
The UK government has announced an extension of the following temporary insolvency measures introduced by Corporate Insolvency and Governance Act (CIGA), 2020.
Highlights include:
- Statutory demands and winding-up petitions will continue to be restricted until Dec. 31 to protect companies from creditor enforcement actions as a result of coronavirus-related debts;
- Termination clauses will remain prohibited, stopping suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process; (Small suppliers will remain exempt from the obligation to supply until March 30, 2021, so that they can protect their business); and
- The new moratorium procedure will also be extended until March 30 2021. A company may enter into a moratorium if it has been subject to an insolvency procedure in the previous 12 months. Measures will also ease access for companies subject to a winding-up petition. The temporary moratorium rules will also be extended to March 30 2021.
Visit gov.uk to read the full report from the Government.
Client Alert 2020-537