Creditor restrictions continued to 30 September 2021

The Government has extended temporary insolvency measures providing further support to businesses during the pandemic.
Tue 22nd Jun 2021

The Insolvency Service has announced an extension to the current restrictions on creditors using statutory demands and winding-up petitions against companies. The extension is for 3 months from 30 June 2021 to 30 September 2021. 

This move is part of the extension of the Government’s package of pandemic related business support measures, following its decision to delay the fourth step of its roadmap out of lockdown. Our recent article, Delays, Guarantees, Summary Judgement and a return to Insolvency Proceedings?, looked at the potential implications of this latest extension for directors and companies.

The specific reference to protection from enforcement in relation to “debts related to coronavirus” in the announcement is interesting. The regulations that will introduce the extension should contain more detail on what it might mean in practice. They should also clarify whether it will be similar to the ringfencing and arbitration provisions accompanying the nine-month extension to the moratorium on evictions for commercial rent arrears announced last week.

There is nothing in the announcement about extending the suspension of liability for wrongful trading, but it does confirm that:

  • Small suppliers will not have to continue to supply businesses that go into and insolvency process.
  • Larger suppliers will not be able to stop supply companies that are going through a rescue process and will not be able to ask those customers for additional payments either.


If you would like more information or advice relating to this article or a Commercial Litigation & Dispute Resolution law matter, please do not hesitate to contact Simon Walsh on 01727 798085.

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