Executive summary

Does the extension of pandemic protections risk creating 'zombie' businesses in the building sector?

The government has extended measures in the Corporate Insolvency and Governance Act 2020 (CIGA) to protect businesses during the pandemic until 30 September 2021.

The CIGA came into force on 26 June 2020. It introduced new procedures and measures to rescue companies in financial distress as a result of the Covid-19 pandemic.

Pandemic protection

The Council of Ministers has approved the creation of the Fund for the Recapitalisation of Companies Affected by COVID-19 (the "FREAC"), which will be funded with 1,000 million euros and will be managed directly by COFIDES. The purpose of the FREAC is to provide a temporary public support under criteria of profitability, risk and impact on sustainable development, in order to strengthen the solvency of medium-sized companies with registered offices in Spain.

An appellate court judgment will bring comfort to liquidators of insolvent companies in respect of the limitation periods applicable in cases of fraud or deliberate concealment

Streamlined bankruptcy rules are due to come into force in June to shield healthy businesses hit by the pandemic

Belgium's Chamber of Representatives has approved (14 March 2021) a bill modifying the current insolvency laws with respect to – and alongside other minor changes – judicial reorganisation, pre-packaged insolvency and fiscal reform.

Last week saw the government further extend COVID-19 emergency insolvency provisions until 31 March 2021. Since April, these have:

What are the principal types of insolvency proceedings?

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.