On 26 June the long-awaited Corporate Insolvency and Governance Act 2020 came into force and introduced emergency measures to provide protection to directors of companies which continue to trade notwithstanding the threat of insolvency, and to prevent, where possible, companies entering into insolvency due to COVID-19.

On 26 June, the long-awaited Corporate Insolvency and Governance Act 2020 became law providing the UK (but with separate provisions for Northern Ireland) with temporary and permanent changes to insolvency law aimed at helping businesses manage the economic implications of COVID-19 including:

Permanent measures

In the second of our series of articles on the much anticipated Corporate Insolvency and Governance Bill (the “Bill”), which will enact various new corporate restructuring tools well as make temporary changes to insolvency law as a result of the coronavirus, we focus on the temporary changes to the law regarding the suspension of liability for directors for wrongful trading during the coronavirus pandemic.

The much anticipated Corporate Insolvency and Governance Bill(the “Bill”), which will enact various new corporate restructuring tools as well as the temporary changes to insolvency law that have been announced by the government since the onset of the COVID-19 pandemic, was finally published on Wednesday 20 May.

View our series of articles summarising the Bill:

The Government has now published the much anticipated Corporate Insolvency and Governance Bill (the “Bill”), which will introduce various new corporate restructuring tools as well as the temporary changes to insolvency law that have been announced by the Government since the onset of the COVID-19 pandemic.

The UK government introduced the Corporate Insolvency and Governance Bill (CIGB) to Parliament on 20 May 2020. As well as including temporary measures to help support businesses affected by COVID-19, it proposes significant permanent changes to UK insolvency law. These proposed permanent changes include a new company moratorium: a mechanism to give a company in financial difficulty a temporary breathing space against creditor action, during which the directors remain in control, but overseen by a monitor.

On 20 May, Parliament had its first reading of the Bill, a detailed document containing all the expected provisions applying across England, Wales and Scotland, and with separate (but substantially similar) provisions for Northern Ireland.

MPs will next consider all stages of the Bill on 3 June 2020 and it is anticipated that this will be fast-tracked to become law in July.

Over the past few weeks, the UK government, regulators and other bodies have moved to help businesses navigate the unprecedented disruption caused by the COVID-19 pandemic. We start this briefing with a round-up of key changes in the areas of company law and corporate finance regulation.

Filing accounts

It is an unfortunate reality that the current pandemic and associated recession will result in the collapse of many businesses, with sectors including retail, hospitality and travel likely to be particularly hard hit. One report by a leading consultancy estimates that half a million UK companies are at risk.

Two recent cases demonstrate the efficacy of existing restructuring regimes under Irish company law and more particularly that the Courts in Ireland are receptive and efficient in approving and implementing large multi-jurisdictional restructuring schemes.

Ballantyne – Scheme of Arrangement