Covid-19 insolvency measures extension
From 26 March 2021 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 will come into force with the effect of extending several of the temporary measures brought in by the Corporate Insolvency and Governance Act 2020 (CIGA).
From 26 March 2021 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 will come into force with the effect of extending several of the temporary measures brought in by the Corporate Insolvency and Governance Act 2020 (CIGA) which were otherwise due to expire at the end of this month.
This was not completely unexpected, mirroring as it does the extension banning forfeiture, but the delayed response led many to think that it might not happen; especially since the Government had labelled the last extension as its ‘final’ extension. Interestingly, the same label has not been applied this time around. As we progress along ‘roadmap’ out of lockdown there are good arguments for easing the suite of temporary restrictions gradually, which may yet mean that more extensions are still to come.
If all goes to plan the ban will end a mere 9 days after the end of lockdown. Is that a long enough reprieve for those businesses that are just starting to get back on their feet? Or is it too long for the creditor who will have been kept waiting for more than a year?
A considered approach needs to be adopted by all whilst the overall landscape, and whether there will be any further extension to the measures, remains uncertain. Debtors in financial hardship would be well advised to use this most recent reprieve to seriously review their options to deal with potentially mounting debts. Whilst some Creditors may resist the urge to take immediate action when enforcement is eventually permitted, others will not, and that reality often causes an inevitable snowball effect.
The legislation will have the following effects:
- Statutory demands and winding-up petitions will continue to be restricted until 30 June 2021.
- Termination clauses will still be prohibited to prevent suppliers from ceasing supply or changing terms whilst a company is going through an insolvency process. The small suppliers’ exemption has been retained until 30 June 2021.
- The entry and extension requirements for the ‘new moratorium’ procedure, will continue to be relaxed in their current form until 30 September 2021.
- The threat of personal liability arising from wrongful trading for directors has been extended until 30 June 2021.
Related expertise
You may be interested in...
Legal Update
Are amendments to be expected for the Arbitration Act 1996?
Press Release
Browne Jacobson advises Care Fertility Group on acquisition of CRGW
Legal Update
The commercial realities of disputes and litigation
Legal Update
The Supreme Court considers limitation in environmental nuisance claims
Press Release
Browne Jacobson partner Jeanne Kelly elected President of the British Irish Chamber of Commerce
Opinion
Vicarious liability of amateur sports teams for player on player injuries
Press Release
Three strong restructuring and insolvency team join Browne Jacobson
Press Release
Browne Jacobson advise on Rcapital’s strategic exit from facilities and property services specialist Triosgroup
Legal Update
Part 36 combined offers – when are they beaten?
Press Release
Browne Jacobson’s patent litigation team praised for being “dynamic” and a “major player” in IAM Patent 1000 guide
Press Release
Law firm advises on MBO of insolvency and restructuring firm Bridgewood backed by DSW Capital
Legal Update
Employment alternative dispute resolution
Legal Update
Insolvency practitioners and trustee immunity
Guide
How to manage retail sector supply contracts and avoid disputes
Press Release
Browne Jacobson grows inheritance and trust dispute practice with partner hire
On-Demand
'Autonomous vehicles: what the future holds' on-demand
Legal Update
Subsidy control lessons to be learnt from Bulb
Legal Update
Vicarious liability – don’t overlook the importance of close connection
Opinion
Practical points from High Court ruling that Tesco has infringed Lidl’s IP rights in its famous yellow circle logo
Published Article
O Shaped mindset when working with witnesses
Opinion
Mediation – remote or in person?
Opinion
Confirmation of Acas early conciliation in the context of multiple claim forms
Opinion
The UK market offers the best value for commercial real estate
Published Article
ClientEarth claim may expand scope of directors' duties
Legal Update
Product distribution – how to protect yourself from an early exit
Legal Update
Embargoed judgments: A professional word of caution
Legal Update
J A Ball Limited (in Administration) v St Philips Homes (Courthaulds) Ltd
Press Release
Browne Jacobson’s intellectual property lawyers ranked experts in World Trademark Review guide 2023
Legal Update - Public matters newsletter
Public matters - January 2023
Opinion
Civil court litigation 2023: Reforms on the horizon
On-Demand
Automotive webinar - EV charging points: contractual and liability issues to be aware of
On-Demand
Automotive webinar - Grant Funding and Collaboration Agreements
In this session, we examined the legal framework around grant funded collaborations and discussed the key risks to be aware of, including IP ownership and compliance with grant terms.
On-Demand
Automotive webinar - Commercial Contracts
Press Release
Browne Jacobson advises sustainable waste solution provider Covanta Europe on its new Wellingborough based aggregate processing plant
Press Release - #BeingBrowneJacobson
From associate to partner in an investment lifecycle - Ryan's story
Press Release - #BeingBrowneJacobson
Browne Jacobson helps the Civil Aviation Authority take off with its modernisation masterplan
Legal Update
Settlement agreements – what are the limitations?
Settlement agreements are commonplace in an employment context and are ordinarily used to provide the parties to the agreement with certainty following the conclusion of an employment relationship.
Legal Update
Five “takeaways” in claims against mortgage brokers following Taylor v Legal & General Partnership Services Ltd [2022] EWHC 2475 (Ch)
Claims arising from interest-only mortgages have been farmed in volume. Many such claims to date have sought to drive a narrative that interest-only mortgages are an inherently toxic product and brokers were negligent simply for suggesting them. Taylor is a helpful recalibration, focussing instead on what the monies raised by the mortgage product were being used for and whether the client understood the inherent risks.
Opinion
The Future of Mediation
Legal Update
Trigger happy when directors’ duties are the target?
In a judgment handed down yesterday the Supreme Court has affirmed that a so called “creditor duty” exists for directors such that in some circumstances company directors are required to act in accordance with, or to consider the interests of creditors. Those circumstances potentially arise when a company is insolvent or where there is a “probability” of an insolvency. We explore below the “trigger” for such a test to apply and its implications.