The Corporate Insolvency and Governance Bill 2020 contains several changes and amendments to laws that could help insolvency practitioners to work even more effectively and efficiently in helping to rescue and restructure companies.
The bill contains both permanent and temporary legal measures to help businesses survive the prolonged coronavirus lockdown and aftermath.
The permanent measures introduced in the bill are:
The temporary measures are set to expire on June 30th but there is provision for the Business Secretary to extend them if required. They include:
Colin Haig, President of R3, the Insolvency and Restructuring trade body, said the bill represented the biggest change to the UK's insolvency and restructuring framework in almost twenty years.
"This legislation comes not a minute too soon.
"The new tools will add to the options available to insolvency and restructuring professionals trying to rescue businesses and will enhance the UK's globally recognised insolvency and restructuring framework.
"Previously the moratorium would only have been open to solvent businesses but now the legislation will enable insolvent businesses to obtain a breathing space to review their options, free from the risk that a creditor may push the company into an insolvency procedure prematurely.
"This greatly increases the number of struggling but potentially viable businesses who could benefit from a vital breathing space and will help to repair the economic devastation caused by the pandemic”.
The new legislation shows the government is serious about giving administrators and insolvency practitioners the tools they need to help rescue and restructure businesses that might otherwise have had a bleak future.
Even the threat of some of the new rules will cause creditors to rethink an aggressive stance and will give a fairer hearing to plans to let a company emerge from lockdown and eventually prosper once again.
Get in touch with us today by email, chat or telephone to see how we can plan to use these new tools to bring your business back from the brink.