COVID19 and the new outlook for insolvency legislation

SA Law's Commercial and Dispute Resolution teams take a look at the temporary and permanent measures under the Corporate Insolvency and Governance Bill 2019-2021 that aims to reduce the Covid-19 pandemic’s impact on business.

The Corporate Insolvency and Governance Bill 2019-2021 is due to become law later this month. The bill is part of the government’s package of measures to reduce the pandemic’s impact on business.

Its provisions are already having a big impact with courts taking account of them in decisions that have stopped landlords putting commercial tenants into liquidation before they have come into force – see our articles and comments here. These particular provisions are intended to be temporary measures that may, and in my view are likely to be, extended. Others will be permanent.

The temporary measures are:

  • Restrictions on the use of statutory demands and winding up petitions
  • A relaxation of directors’ duties in relation to wrongful trading

The permanent measures are:

  • A prohibition on terminating contracts for insolvency
  • The introduction of a new moratorium from creditor action

Read more about the temporary and permanent measures below.

Any questions?

Our commercial team is available to deal with any questions you may have about the bill, directors’ duties and the impact of Covid-19 on your business or customer contracts. You are welcome to get in touch using the enquiry form below.

Contact us about Corporate Insolvency

Should you seek further information or advice with regard to your director’s duties or would like to find out how the Corporate Insolvency and Governance Bill 2019-2021 will affect your company and how best to proceed with restructuring, our Commercial and Dispute Resolution teams would be happy to help.

Simply complete the enquiry form below and we will direct your contact details to the most appropriate legal expert to get in touch with you. It costs nothing to make an enquiry and it is entirely confidential. See our privacy notice to find out how we use and protect your data.

If you would like to contact a specific member of the SA Law team, you can view all team profiles here.

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