Today the Department for Business, Energy and Industrial Strategy announced that certain temporary measures put in place under the Corporate Insolvency and Governance Act 2020 (“CIGA”), which came into force on 26 June, will be extended.

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 were laid before the UK Parliament today and will come into force on 29 September 2020. Pursuant to these regulations, statutory demands and winding-up petitions will continue to be restricted until 31 December 2020.

The new UK legislation for companies in financial difficulty represents a fundamental shift in approach to restructuring in Europe and adds an important new tool to the UK restructuring framework. The availability of a plan proposed under the new Part 26A of the Companies Act 2006 (a “Restructuring Plan”) will undoubtedly change how many distressed companies seek to address their financial difficulties. However, until case law is developed, there will remain considerable uncertainty as to how the Restructuring Plan will work in practice.