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.
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.