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The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (the Bill) has received its first and second readings in the House of Commons and is expected to come into law later this year. But what is this Bill and what does it mean for charities?

The Bill introduces important changes to the insolvency and director disqualification regime in England and Wales and will have implications for incorporated charities including charitable companies and charitable incorporated organisations (CIOs), as well as any trading subsidiaries that your charity may have.

The Court of Appeal has overturned a decision of the High Court on whether immunity from suit, generally afforded to participants in court proceedings, extends to an examinee during an examination conducted under section 236 of the Insolvency Act 1986 ("Section 236").

Once a company is facing Administration (the most common insolvency process for a trading business – although see tip 2 below), the Administrators may look to sell the business and assets. This could be a pre-pack sale, or a regular administration sale and it may only be advertised to a select group of potential buyers or more widely in the market.

The UK Government has announced that the temporary measures which were put in place to protect businesses from insolvency during the pandemic are to be lifted and from 1 October 2021. This means that creditors will be able to seek to wind up debtors who owe them money. But, the devil is in the detail. Creditors do not have carte blanche and new conditions apply. In order to continue to promote business rescue, these conditions will remain in place from 1 October 2021 to 31 March 2022.

An individual ceased trading his Scaffolding firm in Sunderland in December 2019 and immediately began employment with a third party; despite which the enterprising former scaffolder thought it would be a good idea in May 2020 to apply for a £50,000 bounce back loan from HM Government in respect of his previous business. Unsurprisingly, the funds were not applied to the Scaffolding business (which had ceased trading) and instead were used to repay third parties.

The Insolvency Service has today (9 September 2021) announced a phased end (commencing on 1 October 2021) to the temporary insolvency measures which remain as a result of the Corporate Insolvency and Governance Act 2020 (CIGA) and the various extensions to the relevant period (announcement).

The headline measures are as follows:

At the recent R3 Scotland Forum[1], experts in the hospitality and leisure sector came together with the restructuring and insolvency profession to discuss the issues the sector is facing as the country emerges from lockdown. The panel discussion which was chaired by Judith Howson, Senior Manager at French Duncan and member of the R3 Scotland Committee was led by Steven Fyfe, head of the Scotland Hotels Divisions within Savills.

Suffering with mental health problems and being in financial difficulty are often strongly linked, with one frequently causing or worsening the other. The introduction of The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (referred to in this article as the ‘debt respite regulations’), which, with very limited exceptions, came into force on 4 May 2021, allows an eligible individual breathing space from any action a creditor may take for a ‘problem debt’.

Not only was 4 May Star Wars Day this year, it was also the day The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (referred to in this article as the ‘debt respite regulations’) came into force.