The Corporate Insolvency & Governance Act introduces temporary and permanent changes to UK insolvency and restructuring laws.
On 28 March 2020, the UK government announced a number of reforms to UK insolvency laws:
..Temporary suspension of existing wrongful trading rules, in respect of directors’ actions for three months beginning from 1 March 2020 (the period has subsequently been extended). The suspension was intended to ensure that directors in this uncertain COVID-19 environment would be able to take decisions to continue to trade and incur new credit — including under the government funding initiatives — decisions which may otherwise cause directors concern about the potential for personal liability under the wrongful trading regime set out in sections 214 and 246ZB of the Insolvency Act 1986 (IA86). A summary of existing wrongful trading rules is set out below.
..The same legislation would amend the insolvency regime and introduce new insolvency and restructuring regime procedures. The objective of the changes was to further enhance the “rescue culture” for businesses in the UK and, in a single piece of legislation, to allow potentially strong businesses to survive and hopefully thrive — similar to the US and its chapter 11 process.
Please see full publication below for more information.
