The COVID-19 (coronavirus) pandemic triggered – in addition to health and human tragedies – the most serious economic crisis since World War II. This economic crisis has led to financial difficulties for many German companies – especially in the tourism, gastronomy, aviation, hotel, culture and event sectors. COVID-19 also affects the overall economic development in many other sectors.
Introduction
What are the principal types of insolvency proceedings?
The UK Government has reintroduced the temporary suspension of wrongful trading measures from 26 November 2020 until 30 April 2021 pursuant to The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations. The suspension was originally introduced in March 2020 under section 12 of the Corporate Insolvency and Governance Act 2020 and expired on 30 September 2020.
In our previous update dated 5 November 2020, we looked at when it is reasonable for insolvency practitioners to continue litigation. In this article, we explore the circumstances in which personal costs orders may be made against liquidators.
Key points
Today, new legislation comes into force* that provides directors of companies in financial difficulty with a second breathing space from the financial impact of the wrongful trading provisions.
On 26 June 2020, the Corporate Insolvency and Governance Act 2020 (Act) came into force with changes to insolvency law to help businesses manage the economic implications of Covid-19. The new Act’s permanent measure on continuing supply stands out for the construction industry.
The onset of COVID-19 has precipitated and accelerated substantial change for businesses in fashion retail, adding to particular headwinds already facing the sector in the UK. While many brick-and-mortar fashion retailers were already experiencing challenging trading conditions at the start of 2020 – ranging from rent and rates overheads to increased online competition – restrictions on and changes to consumer preferences resulting from the pandemic have intensified the challenges facing many fashion retailers and businesses operating in the supply chain.
This round-up collates the information, analysis and guidance relating to insolvency issues shared by our Construction and Restructuring, Insolvency and Bankruptcy teams during the COVID-19 pandemic. For further information on any of the issues below, please get in touch with one of the Key Contacts.