Insolvency measures that were introduced in the Corporate Insolvency and Governance Act (2020), designed to support businesses during the COVID-19 pandemic, and which were due to end on 30 June 2021, are set to be extended until 30 September 2021 following an announcement on 16 June 2021.
As we have previously reported, the protections are designed to provide breathing space to businesses that have struggled as a direct result of the pandemic as the Government look to reopen the economy and embark on a sustained period of economic growth.
Here is a summary of the measures that are being further extended:
- Statutory demands and winding up petitions will remain restricted in most circumstances in an attempt to protect companies from creditor enforcement action as a result of debts relating to COVID-19;
- Entry into a moratorium will remain relaxed and a company will be able to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months;
- Smaller suppliers will no longer be obliged to supply a business in insolvency. However, it is important to note that larger suppliers will be unable to cease their supply or request additional payments while a company is going through a ‘rescue process’.
If you require further information on the Corporate Insolvency and Governance Act (2020) or to discuss a particular matter in further detail, feel free to get in touch with Adina-Leigh Collins or Bimal Kotecha in the Grant Saw Litigation department. Alternatively, you can contact the Litigation team on 020 8858 6971.