The Corporate Insolvency and Governance Act (“the Act”) became law on 26 June 2020. (Read our previous update on the Act here). As has been widely discussed, the Act introduces new corporate insolvency rescue procedures as well as temporary and permanent insolvency and corporate governance measures.

The UK Government announced on 24 September 2020 that some of the temporary Covid-19 measures introduced under the Corporate Insolvency and Governance Act (“the Act”) will be extended.

Summary of extension

Summary of extension

The Treasurer has announced major proposed reforms to Australia’s insolvency framework aimed at facilitating the restructuring of small to medium businesses (MSMEs) and streamlining their liquidation if rescue is not achievable (Reforms). The Reforms are intended to come into effect from 1 January 2021, after the suite of current insolvency protections introduced to address the economic impact of COVID-19, expire on 31 December 2020.

The Australian Government has announced that the operation of temporary COVID-19 relief measures for businesses in the hope of aiding distressed companies and preventing further economic breakdown will be extended until 31 December 2020.[1]

In its recent judgment involving the PAS Group of companies[1], the Federal Court held that rent payable by the PAS Group during an extension of the period in which an administrator had been excused from personal liability (Standstill Period) is an expense properly incurred by a ‘relevant authority in carrying on the company’s business’ and is therefore a priority debt under s 556(1)(a) of the Corporations

This article highlights where the legislation, as it was introduced in the Bill, differs from the final form of the Act

Temporary measures to continue until the end of September 2020

The Supreme Court of New South Wales has helpfully given guidance to the liquidators of the RCR Tomlinson Group on a number of unsettled questions that have challenged insolvency practitioners (particularly liquidators of construction companies) when assessing whether certain intangible rights and assets are circulating assets.

The questions include:

The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, if approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime. The Bill includes a number of measures designed to protect businesses which are struggling as a result of the coronavirus pandemic. Some of these measures are temporary, however parliament may decide to extend these if necessary.

The key measures included in the Bill are summarised below.

Temporary provisions

The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, once approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime.