Government Announces Insolvency and Restructuring Changes in Response to COVID-19
As part of the Government’s recent support packages being rolled out to both business and individuals in response to the Coronavirus pandemic, news of insolvency law reforms have been announced.
On 28th March 2020, Business Secretary, Alok Sharma, presented a plan for new insolvency legislation which has the aim of supporting businesses to continue trading and avoid insolvency during this challenging time.
The Government has said it will introduce:
- A short business rescue moratorium to give companies breathing space from creditor action while they consider their options regarding rescue or restructure.
- A new court-based restructuring tool which will bind creditors.
- New rules to prevent suppliers from cancelling contracts with businesses in an insolvency procedure.
- The temporary suspension of wrongful trading provisions in the Insolvency Act 1986.
With Parliament now in recess until at least the 21st April 2020, the timing and introduction of this legislation has yet to be confirmed – but the intention is welcome news to company directors, who will be understandably concerned about their personal liability at this time of real economic uncertainty.
Here at Fosters Solicitors our team of Insolvency & Restructuring Lawyers have a wealth of experience and knowledge to assist you in relation to any legal query or matter you may have. Call us on 01603 723799 to speak with a member of the team.
This article was produced on the 7th April 2020 by our Business & Commercial team for information purposes only and should not be construed or relied upon as specific legal advice.