It is not uncommon for a person's job title to include the word "director", such as "Finance Director" or "Marketing Director". While such roles will carry a high level of responsibility, the individuals in these positions are not always formally appointed to the company's Board of directors. Even though such persons are not formally appointed as directors, they may still owe all (or at least some) of the same directors' duties as an appointed director.
As we attempt to mitigate the potential effects of the COVID-19 pandemic on our global supply chain, stakeholders should be actively considering downstream impacts. In this current environment, considering prospective internal and external bankruptcy and restructuring threats may be more important than ever.
Introduction
Final amendments to the Corporate Insolvency and Governance Bill were approved by the House of Lords on 23 June 2020, and by the House of Commons on 25 June 2020. The Act came into force on 26 June 2020, however certain provisions have retrospective effect from 1 March 2020. It will have a significant impact on defined benefit pension schemes, and the ability of pension scheme trustees to take action if the scheme's employer is struggling. This legal update explores the Act's key provisions through a pensions lens.
Creditors and Coronavirus
As the scale of the economic impact on businesses and individuals of the Coronavirus pandemic becomes apparent, the Scottish and UK governments have sought to protect companies and individuals from creditor led insolvency events.
Bankruptcy:
In previous blogs, we’ve discussed the temporary changes to the law being brought about by the UK Government’s Corporate Insolvency and Governance Bill. The Bill is set to strip Landlords of some of the tools available to recover arrears from their tenants. It will render statutory demands served between 1 March to 30 June 2020 ineffective, while making it near impossible for landlords to liquidate tenants (by winding them up) if they have been financially affected by COVID-19.
In previous blogs, we’ve discussed the temporary changes to the law being brought about by the UK Government’s Corporate Insolvency and Governance Bill. The Bill is set to strip Landlords of some of the tools available to recover arrears from their tenants. It will render statutory demands served between 1 March to 30 June 2020 ineffective, while making it near impossible for landlords to liquidate tenants (by winding them up) if they have been financially affected by COVID-19.
Introduction
The Corporate Insolvency and Governance Bill (“Bill”) was published on 20 May 2020. The overarching objective of the Bill is to provide businesses with the flexibility and breathing space they need to continue trading during this difficult time. The measures introduced by the Bill are designed to help UK companies and other similar entities by easing the burden on businesses and helping them avoid insolvency during this period of economic uncertainty.
Executive Summary
- New legislation will introduce permanent and temporary reforms to the UK restructuring and insolvency regime
- Permanent reforms: company moratoriums; restructuring plans; the prohibition of insolvency termination clauses in supply contracts
- Temporary reforms: suspension of the director wrongful trading offence; restriction on the service of statutory demands and winding up petitions
Overview