The Corporate Insolvency and Governance Act 2020 introduced a number of temporary changes to UK insolvency laws last year. Those changes, together with other measures such as the moratorium on forfeiture proceedings have recently been extended, we assume, to avoid the perceived cliff edge of insolvencies that might follow if such measures are brought to an end abruptly.
As with many of the UK government announcements and legislative changes, these have been announced in a piecemeal fashion and it is not always easy to keep track of what has been extended and until when. Below is a summary of the position as it currently stands:
- The exemption from the ipso facto regime (preventing a small supplier from terminating a contract for insolvency related reasons) has been extended until 30 June 2021 (see our updated quick guide).
- Temporary changes to the criteria for obtaining a corporate moratorium that allow a company that has been subject to a winding up petition, CVA, moratorium or administration in the past 12 months are extended until 30 September 2021 (see our updated quick guide).
- The temporary restrictions affecting winding up petitions have been extended until 30 June 2021 (see our previous blog for more detail). This does not mean that a winding up petition cannot be presented, but the petitioner will have to overcome the ‘coronavirus test’ in order to proceed with a petition (see our previous blogs here and here that explain how the courts have interpreted this test).
- The temporary suspension of the wrongful trading provisions is also extended until 30 June 2021.
- The prohibition on forfeiture proceedings has also been extended until 30 June 2021 (for further reading about the impact of this on landlords see our blog)
You can access our quick guide to the restructuring plan here.