1. Introduction
The Corporate Insolvency and Governance Act 2020 received Royal Assent and is now in force.
The Corporate Insolvency and Governance Act 2020 received Royal Assent and is now in force.
The detrimental impact of the Corporate Insolvency and Governance Bill on defined benefit (DB) pension schemes and the Pension Protection Fund (PPF) has been highlighted forcefully by peers in the first sitting of the Committee stage in the House of Lords, which took place yesterday. The leading statements made by peers, together with the Government’s response from Lord Callanan can be found below.
The Government on 20 May 2020 published the Corporate Insolvency and Governance Bill, which contains the most far-reaching reforms to UK insolvency law in over 30 years. The Bill has been introduced on an emergency basis in an attempt to ensure that otherwise financially viable companies survive during a period of unprecedented interruption and turmoil.
The Government on 20 May 2020 published the Corporate Insolvency and Governance Bill, which contains the most far-reaching reforms to UK insolvency law in over 30 years. The Bill has been introduced on an emergency basis in an attempt to ensure that otherwise financially viable companies survive during a period of unprecedented interruption and turmoil. However, it could upset the delicate balance between debtors and creditors under UK insolvency law.
Yesterday, the Government introduced legislation before Parliament, in the form of the Corporate Insolvency and Governance Bill, which will make radical changes to the UK insolvency regime. The goal of the legislation is to prevent otherwise viable companies from failing as a result of current events.
During the COVID-19 crisis, many companies are facing unexpected financial distress, and taking steps to stabilise their business and bolster their finances.
Many directors will not have experienced these issues before, and should be aware of how their duties are impacted when the company is in financial distress.
This guide has been prepared on the basis of Hong Kong law principles. Many of the principles will also be applicable to other common law jurisdictions.
How are companies responding to the current crisis?
On Monday, in its response to the consultation on protecting DB pension schemes and strengthening the Pensions Regulator, the Government confirmed its plans to: