The Corporate Insolvency and Governance Bill has now been published.
The key features of the Bill are as follows:
- A temporary ban (between 1 March 2020 and 30 June 2020) on the use of statutory demands in relation to companies and the prevention of the presentation of winding up petitions (between 27 April 2020 and 30 June 2020) where a company’s failure to pay is as a result of the coronavirus crisis;
- Contractual termination clauses activated by an insolvency event in contracts for the supply of goods and services will be invalidated in the context of insolvency proceedings.
- The creation of a new moratorium to protect businesses from creditor pressure if it is considered that they can be rescued as a going concern;
- The effective temporary suspension of the wrongful trading provisions for a period of 3 months from 1 March 2020; and
- A new restructuring procedure, similar to a scheme of arrangement.
It is currently expected that the Bill will become law in early June.
The full text of the Bill can be found here:
In conjunction with the above, HMRC has also published guidance indicating that it will support temporary payment holidays in the case of individual and company voluntary arrangements and that it will not pursue bankruptcy or winding up petitions for enforcement purposes in the current climate unless it is deemed essential (i.e. where there are allegations of fraud or criminal activity).
We will set out further thoughts on each of the features highlighted above over the coming weeks and as the Bill progresses through parliament.
If you wish to discuss any of the issues referred to above or require further guidance, please do not hesitate to contact Daniel Clarke or Heather Morris.
M (0)7920 237687