The Corporate Insolvency and Governance Bill (the Bill) has completed all of its stages in the House of Commons, without material amendment to the Bill as originally drafted. All three readings in the House of Lords are scheduled to take place in June 2020, and expectations are that the Bill will receive Royal Assent, and will be enacted, very shortly thereafter.
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.
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.
Australian satellite-based IoT startup Sky and Space Global Ltd. filed for Voluntary Administration in Australia, the equivalent of a Chapter 11 bankruptcy in the United States. April 13 – OneWeb Global Ltd. (OneWeb), which filed for Chapter 11 bankruptcy protection in the United States last month, announced that it secured a commitment from its largest secured creditor, SoftBank Group Corp., to provide up to $75m in debtor-in-possession (DIP) financing to fund its ongoing operations during the bankruptcy proceeding. The DIP financing proposal was approved
On 6 April 2020, the Insolvency Act 1986 (Prescribed Part) (Amendment) Order 2020 came into force. This order amends the Insolvency Act 1986 (Prescribed Part) Order 2003, and increases the maximum amount of the prescribed part from £600,000 to £800,000.
Prescribed Part
The “prescribed part” is the term given to a portion of funds realised from assets charged by way of floating, but not fixed, charge, where:
1 the floating charge was created on or after 15 September 2003; and
On 28 March 2020, the UK government announced it would be implementing new measures to improve the insolvency system aiming to, amongst other things, support businesses under pressure as a result of the COVID-19 outbreak and resulting restrictions.
Government support package – relaxation of insolvency rules
The government has responded to intense pressure from the restructuring and insolvency community by announcing measures to 'protect companies hit by COVID-19'. Insolvency law will be amended 'to give companies breathing space and keep trading while they explore options for rescue'.
RAAs are a statutory restructuring mechanism which operate by apportioning the departing employer’s share of liability between it and remaining employers. As an RAA can be entered before the insolvency process is initiated, RAAs can permit corporate restructuring in response to financial hardship without triggering the departing employer’s insolvency.