Having gone through an accelerated parliamentary process, the Corporate Insolvency and Governance Act 2020 came into force on 26 June, 2020 having been given Royal Assent on the 25 June, 2020.
It introduces the most significant changes in corporate insolvency law for nearly 20 years and has been introduced in response to COVID-19. Its main aim is to assist companies and directors by providing businesses with the flexibility and breathing space they need to continue trading during the difficult time caused by COVID-19.
The key insolvency related reforms included in the Act are:
- New moratorium outside of a formal insolvency process - New restructuring plan - Prohibition on issuing statutory demands and winding up petitions in connection with Covid-19 related debts - Retrospective suspension of wrongful trading - Protection of supplies of goods and services
Read an extract of Bloomsbury Professional Law Insight - Corporate Insolvency and Governance Act 2020
Table of Contents
Chapter 1: Introduction WHAT NEW PROVISONS HAVE BEEN INTRODUCED? WHAT HAS BEEN THE REACTION TO THE PERMANENT CHANGES? Chapter 2: Moratorium INTRODUCTION WHICH COMPANIES WILL BE ELIGIBLE FOR A MORATORIUM? HOW CAN A COMPANY OBTAIN A MORATORIUM? WHAT IS THE EFFECT OF A MORATORIUM? THE MONITOR WHAT IS THE DURATION OF A MORATORIUM? CHALLENGES IN CONNECTION WITH A MORATORIUM INSOLVENCY PROCEDURES FOLLOWING A MORATORIUM AND SUPER-PRIORITY Chapter 3: Restructuring plan INTRODUCTION WHEN WILL A COMPANY BE ELIGIBLE FOR A RESTRUCTURING PLAN? WHAT MUST A RESTUCTURING PLAN BE DESIGNED TO ACHIEVE? WHAT IS THE PROCEDURE FOR ADOPTING A RESTRUCTURING PLAN? WHICH STAKEHOLDERS VOTE ON THE RESTRUCTURING PLAN? THE CONVENING HEARING CLASS COMPOSITION ISSUES THE NOTICES OF MEETINGS THE MEETINGS THE SANCTION HEARING THE ORDER MADE AT THE SANCTION HEARING FOREIGN COMPANIES AND STAKEHOLDERS PENSION SCHEMES Chapter 4: Restrictions on the termination of supply contracts INTRODUCTION THE PRE-CIGA 2020 REGIME THE CHANGES INTRODUCED BY CIGA 2020 WHAT RESTRICTIONS WILL BE IMPOSED? HOW WILL THE NEW PROVISIONS WORK IN PRACTICE? Chapter 5: Temporary provisions ADMINISTRATION: SALES TO CONNECTED PERSONS SUSPENSION OF LIABILITY FOR WRONGFUL TRADING SUSPENSION IN RELATION TO WINDING-UP PETITIONS REGULATIONS TO AMEND LEGISLATION