OVERVIEW

This article was first published in International Corporate Rescue by Chase Cambria.

The Corporate Insolvency and Governance Act (‘CIGA’) which came into force on 26 June 2020 represents one of the biggest changes to the insolvency law of England and Wales in two decades.

This note considers the way in which the practice directions governing insolvency proceedings have evolved during 2020.

Perseverance, dear my lord Keeps honour bright: to have done, is to hang Quite out of fashion, like a rusty mail In monumental mockery William Shakespeare, Troilus and Cressida

Styles & Wood (In Administration) v GE CIF Trustees (unreported) (County Court at Central London)

A number of recent extensions and changes to temporary measures have been announced that impact insolvency practice and procedure, what are they?

The UK Government announced on 24 September 2020 that some of the temporary COVID-19 measures within the Corporate Insolvency and Governance Act 2020 (CIGA) will be extended.

The effect of the extension is as follows:

On 29 September 2020 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 came into force. To keep this snippy, we’ll refer to these new Regulations as “CIGAR”.

The reactivation of wrongful trading rules at the end of last month marks the return of personal liability risk for directors of businesses that continue to trade while on the brink of insolvency.

In recent years, market participants have watched with interest from across the Atlantic as U.S. out-of-court liability management and restructuring transactions moved material assets out of the creditors' collateral pools, to enhance liquidity, to raise additional debt or to extend the maturity of existing debt. Many have wondered when these sort of transactions will reach European shores.

That moment has now arrived.

INTRODUCTION

In the wake of the Supreme Court's ruling that an insolvent company can adjudicate, the TCC have confirmed that there remain high hurdles to the insolvent party enforcing any adjudication decision.

Adjudication by insolvent parties is an issue that has greatly occupied the Courts of late. Much consideration has been given to the arguable conflict between set-off under the Insolvency Rules 2016 on the one hand, and the adjudication process on the other.