On 20 May 2020, the Corporate Insolvency & Governance Bill 2019-2021 was introduced to Parliament. With the Bill slated to be fast-tracked into law, here are some of the key insolvency aspects to be aware of.

Why now?

On 20 May 2020, the Government introduced the Corporate Insolvency and Governance Bill in Parliament. The Bill is a much awaited development following the Secretary of State for Business, Energy and Industrial Strategy’s statement on 28 March 2020 announcing key measures to help businesses address the challenges resulting from the impact of coronavirus.

Financial services firms subject to special insolvency regimes supervised by the FCA, PRA, and other financial services regulators have been largely excluded by the Bill.

On 20 May 2020, the Corporate Insolvency and Governance Bill had its first reading in the House of Commons.This is the bill that enacts many of the measures referenced in the government's announcements earlier this year.

As reported last month, as part of its response to the Covid-19 pandemic, the UK Government has brought forward reforms to the corporate insolvency regime. The Corporate Insolvency and Governance Bill (the "Bill") has now been introduced to Parliament.

The new Corporate Insolvency and Governance Bill contains a mixture of temporary measures necessitated by the immediate economic and practical challenges of COVID-19, and longer-term reforms to our restructuring and insolvency regime.

The UK Government has tabled legislation to assist companies in financial difficulty and to make temporary changes to the law relating to the governance and regulation of companies. The Corporate Insolvency and Governance Bill1 (the "Bill"), which commenced its passage through the UK Parliament on 20 May 2020, is relevant to public companies as it provides for the temporary relaxation of certain requirements regarding annual general meetings ("AGMs") and other shareholder meetings and the temporary easing of certain statutory filing requirements.

The Corporate Insolvency and Governance Bill (the “Bill”) is finally out (all 238 pages of it!) and due to have its second reading in Parliament on 3 June. The expectation is that it will pass without debate and, as such, we need to ask ourselves: what does it all mean? The first thing to note is that the Bill deals with both temporary measures that are necessary and linked to the Covid-19 pandemic as well as those that are here to stay and that have been on the radar since the Government’s consultation ended in 2018.

The Corporate Insolvency and Governance Bill 2019-21 introduced to the UK parliament on 20 May contains provisions designed to give companies greater administrative flexibility during the COVID-19 pandemic, including how and when they are required to hold their AGMs and other general meetings and when key Companies House filings have to be made, such as annual accounts, confirmation statements and other forms, as well as the registration of charges.

The UK Government has proposed legislation to address the difficulties faced by UK companies as a result of the COVID-19 pandemic when it comes to holding meetings of shareholders and filing documents with the UK Registrar of Companies (Companies House).

Executive Summary

• New legislation will introduce permanent and temporary reforms to the UK restructuring and insolvency regime
• Permanent reforms: company moratoriums; restructuring plans; the prohibition of insolvency termination clauses in supply contracts
• Temporary reforms: suspension of the director wrongful trading offence; restriction on the service of statutory demands and winding up petitions

Overview