This blog post was written by a Freshfields team comprising Ken Baird, Catherine Balmond, Lindsay Hingston, Richard Tett, Adam Gallagher, Neil Golding, Craig Montgomery, and Katharina Crinson.
As widely blogged about, on 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force, introducing both far-reaching wholescale reforms to the UK’s restructuring toolbox as well as temporary measures dealing with COVID-19 impacts on companies. The two most significant temporary measures for companies facing financial difficulties as a result of the COVID 19 pandemic were:
- A suspension of personal liability for wrongful trading initially until 30 September 2020.
- A temporary prohibition on creditors from filing statutory demands and winding up petitions for COVID-19 related debts also initially until 30 September.
Both have now been extended. The wrongful trading suspension lapsed on 30 September but was re-introduced on 26 November to last until 30 April 2021.
The prohibition on creditors from filing statutory demands and winding up petitions for COVID-19 related debts was extended originally to 31 December 2020 but has today been extended further to 31 March 2021.
The CIGA provided that the temporary periods can be extended but not later than 5 April 2021. We will have to see what happens in spring 2021 when many temporary measures (insolvency and real estate related) time out.
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