LEGAL UPDATE – Corporate Insolvency and Governance Act 2020 – Times Extended
Key contact: Hugh Hitchcock
Authors: Hannah Jones & Michael Hinder
HMG yesterday (24.9.20) brought into force a new statutory instrument to extend the operation of several COVID-19 related restrictions and measures that were enacted in the Corporate Insolvency and Governance Act 2020.
A number of these measures were due to expire on 30 September 2020, but will now expire on one of three new dates as noted below:
- Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020.
- Termination clauses are still prohibited – Small suppliers will remain exempted from the obligation to supply until 30 March 2021.
- Companies and other qualifying bodies with obligations to hold Annual General Meetings will continue to have the flexibility to hold these meetings virtually until 30 December 2020.
- Modifications to the new moratorium procedure, relaxing the entry requirement to it, will also be extended until 30 March 2021. A company may enter into a moratorium if they have been subject to an insolvency procedure in the previous 12 months. Measures will also ease access for companies subject to a winding up petition. The temporary moratorium rules will also be extended to 30 March 2021.
These extensions were essential. It gives businesses continued breathing space to restructure the debt accumulated over this crisis and seek advice where necessary.
For more information on this topic, contact the Litigation Team.