“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.
- 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