The Corporate Insolvency and Governance Bill was finally introduced to Parliament on 20 May. It is now clear that the provisions of the Bill relating to statutory demands and winding up petitions will apply to Scotland without the need for the Scottish Government to pass further legislation.

Statutory demands

In our recent update on AGMs, we mentioned that the Government is due to pass legislation giving companies increased flexibility for holding Annual General Meetings, amongst other measures to help businesses through the COVID-19 situation.

The interaction between the principles of insolvency law and the Coronavirus Job Retention Scheme (JRS) have come into sharp focus in recent weeks, with the administrators of Carluccio's and Debenhams seeking guidance from the English courts about how the scheme impacts on their obligations to employees.

The Corporate Insolvency and Governance Bill (the “Bill”) has been laid before the UK Parliament today, Wednesday 20 May 2020.

The Bill, if passed, will implement some significant changes to UK insolvency law and at the same time effect a range of temporary measures to assist with corporate governance during the Covid-19 situation.

Moratorium for protection from creditors

Times are changing rapidly with the current flow of Coronavirus measures introduced to support businesses in debt and distress.

We take a look at what creditors can (and can’t) do to help better protect their position.

I’m owed money. What can I do?

Certain recent government measures may impede your ability to take recovery or enforcement action at the present time. The good news is that many avenues remain available.

You cannot (in some cases):

The Coronavirus (Scotland) (No.2) Bill (the “Bill”) has been introduced by the Scottish Parliament today, 11 May 2020. The aim of the Bill is to respond to the financial impact the COVID-19 pandemic is having on individuals and small businesses (by that Scottish Ministers mean sole traders, not companies incorporated under the Companies Act 2006).

As part of its response to the COVID-19 situation, Companies House has announced that it will accept the filing of statutory insolvency documents via emailed PDF attachments.

This measure applies to companies registered in Scotland, as well as England & Wales and is yet another practical example of the steps being taken to try and alleviate the administrative burden on insolvency practitioners.

It is perhaps not as well-known as it should be that the Bankruptcy (Scotland) Act 2016 sections 195 – 198 provides a six-week moratorium – effectively a postponement or period of protection from action to recover debts - to individuals, partnerships and trusts facing financial distress or liquidity issues.

The moratorium provides breathing space to allow parties to be protected from their creditors while they take advice and consider what debt relief options might be available to them.

A party can normally apply for the moratorium once in any 12-month period.

In a recent decision in the Supreme Court of NSW[1], Rees J set aside a liquidator’s bid to publicly examine two senior officers of the National Rugby League (NRL), finding that examination summonses issued by the liquidator were an abuse of process and the entire liquidation process was a contrivance in order to exert commercial pressure on the NRL.

The Coronavirus Economic Response Package Omnibus Bill 2020 (Coronavirus Response Bill) was passed on 23 March 2020 and received Royal Assent on 24 March 2020 following the Federal Government’s announcements made between 12 and 22 March 2020 of its economic response to the spread of the coronavirus pandemic.

The Coronavirus Response Bill provides, amongst other legislative amendments, for temporary changes of 6 months’ duration to Australian insolvency and corporations laws to assist in managing the sudden economic shock resulting from COVID-19.