The new Corporate Insolvency and Governance Bill (the Bill) has been introduced into the UK Parliament and proposes significant changes to insolvency law, including:
As COVID-19 spread across the globe like wild fire, many of its effects—including an economic downturn and emerging disputes risks—are being felt across markets.
On 3 June 2020, the Corporate Insolvency and Governance Bill was debated by the Committee of the Whole House of Commons. This follows on from the first reading in the House of Commons on 20 May 2020. This is the bill which enacts many of the measures referenced in the government's announcements earlier this year.
On 20 May 2020, the Corporate Insolvency and Governance Bill had its first reading in the House of Commons. This is the bill that enacts many of the measures referenced in the government's announcements earlier this year.
May Restructuring Activity
May 4 – OneWeb Global Ltd., which filed for Chapter 11 bankruptcy protection in the United States in March, received multiple initial letters of interest from potential purchasers. Final binding bids are due June 26, along with a deposit equal to 10% of bid value, and an auction is scheduled for July 2.
In March 2020, the UK government announced that changes will be made to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.
The legislation implementing this has now been laid before Parliament in the Corporate Insolvency and Governance Bill. This includes measures intended to tide companies through the COVID-19 pandemic, as well as far-reaching wholesale reforms to the UK’s restructuring toolbox.
On 26 May 2020, the Dutch Lower House adopted the long-awaited legislative proposal regarding the Dutch scheme (Wet Homologatie Onderhandsakkoord (WHOA)).
This is an important step towards the entry into force of the proposal. The Senate still needs to approve, but this can usually be done much quicker and less debate is expected.
The Senate will discuss the procedure of the treatment on 2 June 2020. Once the Senate has voted and it becomes clear when the WHOA comes into force, we will post a new update.
On 20 May 2020, the Corporate Insolvency and Governance Bill had its first reading in the House of Commons.This is the bill that enacts many of the measures referenced in the government's announcements earlier this year.
The Corporate Insolvency and Governance Bill has been introduced to Parliament. MPs will consider all stages of the Bill on 3 June 2020 and it will then progress to the House of Lords. The Bill is subject to the fast-track procedure as it aims to give companies flexibility and breathing space to continue trading in the COVID-19 crisis rather than entering into insolvency.
In addition to the crisis-related measures, there are three key areas of the Bill which will affect financial services companies and their arrangements with customers:
As the business world starts to count the cost of the COVID-19 pandemic and the government measures taken to contain it, attention is turning to the tools available to help companies that have been financially impacted.
Many companies are deferring payments to conserve liquidity, raising difficult questions around directors’ duties and leading to an immediate focus on how to protect the business from resulting creditor action.