The UK’s reformed restructuring regime shows its force with the first successful cross-class cram-down following the introduction of the new restructuring plan. A quick legal update on the key features of the restructuring plan and the analysis of the recent cases can be found in the infographic below.

Contributors to this update were Howard Morris, Amrit Khosa, Jai Mudhar, Joe Donaghey, and Haania Amir.

On Sunday, December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, which provides $900 billion in a second wave of economic stimulus relief for industries and individuals faced with challenges from the COVID-19 coronavirus.

The Corporate Insolvency and Governance Act (“the Act”) became law on 26 June 2020. (Read our previous update on the Act here). As has been widely discussed, the Act introduces new corporate insolvency rescue procedures as well as temporary and permanent insolvency and corporate governance measures.

The UK Government announced on 24 September 2020 that some of the temporary Covid-19 measures introduced under the Corporate Insolvency and Governance Act (“the Act”) will be extended.

Summary of extension

Summary of extension

The COVID-19 pandemic has triggered unprecedented levels of business disruption and forced numerous companies into bankruptcy in an effort to preserve dwindling liquidity and postpone creditor demands. Retailers, whose brick-and-mortar locations were already struggling to adapt to an increasingly online marketplace, have been among the hardest hit. A number of bankruptcy judges, faced with the prospect of an avalanche of forced liquidations, have thrown these debtors a lifeline by approving requests to suspend lease payments.

This article highlights where the legislation, as it was introduced in the Bill, differs from the final form of the Act

Temporary measures to continue until the end of September 2020

The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, if approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime. The Bill includes a number of measures designed to protect businesses which are struggling as a result of the coronavirus pandemic. Some of these measures are temporary, however parliament may decide to extend these if necessary.

The key measures included in the Bill are summarised below.

Temporary provisions

The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, once approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime.

The Government has put in place substantial measures that are intended to help mitigate the devastating effect of Covid-19 on the UK economy. Many businesses are now facing their toughest test in living memory. Yet even as the UK endures extraordinary lockdown measures, and with some 3.9 billion people in global isolation, directors of UK companies must continue to try and keep their businesses out of insolvency.