The Government has announced that the insolvency measures that were introduced in the Corporate Insolvency and Governance Act (2020), designed to support businesses during the COVID-19 pandemic, are set to be extended until 30 September 2021 following an announcement on 16 June 2021. They were due to end on 30 June 2021.
The protections were implemented to provide “breathing space” for businesses that have directly struggled as a result of the pandemic as the Government looks to kick start the economy and embark on a period of economic growth.
Here is a summary of the measures that are being further extended:
- As a result of debts that relate to COVID-19, statutory demands and winding up petitions will remain restricted in most circumstances in an attempt to protect companies from creditor enforcement action;
- A company will be able to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months and entry into a moratorium will remain relaxed;
- Smaller suppliers will not be obliged to supply a business in insolvency. However, please note that larger suppliers will be unable to cease their supply or request additional payments while a company is going through a ‘rescue process’.
There remains no restrictions against personal insolvency action.
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, our insolvency experts. Alternatively, please contact the team directly on 020 8308 3610.