End of CIGA restrictions
On 1 October 2021 the temporary changes to corporate insolvency law, brought about by the Corporate Insolvency and Governance Act 2020 (CIGA) and which seriously curtailed creditors’ ability to present winding-up petitions between 1 March 2020 and 30 September 2021, changed.
Subject to exceptions, a director of a company that enters into liquidation is restricted from being involved in the management of a new or existing company (SecondCo) with the same or a sufficiently similar name to that of the liquidating company (section 216 Insolvency Act 1986 (IA 1986)). If in breach of s.216, a director will have personal liability for all the relevant debts SecondCo incurred during the period of the breach under s.217 IA 1986.
It’s autumn and time to put that box-set viewing on pause and perhaps instead review the likely direction of travel of the “zombie” army of distressed businesses. How do you avoid contagion?
Unless you hibernated during the various lockdowns you will not have failed to notice that the impact of Brexit, the Covid-19 pandemic, and lockdown measures took their toll on spending, incomes and jobs, tipping the UK economy into recession after negative growth in the first two quarters of 2020.
In recent weeks, headlines around the UK have declared a crisis in the gas and energy sector: prices rising, suppliers collapsing, and customers – and industry professionals – wondering what has gone wrong.
The coronavirus pandemic posed a significant challenge to the financial health of businesses across the UK. A sector additionally at the mercy of the markets following the easing of lockdown restrictions is the energy industry, with the wholesale price of natural gas (measured on a pence per therm basis) having risen dramatically from around 50p/therm in January 2021 to over 200p/therm during the first few weeks of October 2021.
The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (the Bill) is, at the time of writing, at second reading stage in the House of Lords and progressing quickly towards becoming law later this year.
Judgment was given by the Court of Appeal yesterday (7th October) in John Doyle Construction Limited (In Liquidation) v Erith Contractors Limited. This important case considered the relationship between adjudication and insolvency proceedings in the context of applications to enforce an adjudicator's decision. The underlying contract between JDC and Erith had related to hard landscaping works at the London Olympic park in Stratford.
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.
On 9 September 2021, the UK Government announced that the current restrictions on the use of statutory demands and the presentation of winding up petitions (as introduced by Schedule 10 of Corporate Insolvency and Governance Act 2020 (“CIGA”) and set to expire on 30 September 2021) will be amended by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10 Regulations 2021) (the “Regulations”) and replaced with more limited restrictions (discussed below) until 31 March 2022.
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: