Part One

The Corporate Insolvency and Governance Bill (the Bill) is passing through parliament at the moment. Some of the measures included in the Bill are in response to the current pandemic and will provide temporary easements for company directors from an acute economic downturn. Other measures have been under consideration for a while, and will be permanent.

Our restructuring colleagues provide some insights into the proposed new measures on their blog page.

The Corporate Insolvency and Governance Bill is currently being fast-tracked through Parliament, but is the Government making a mistake in seeking to combine a short-term breathing space for businesses during the current Covid-19 crisis with introducing the greatest changes we have seen to UK insolvency laws for decades?

Few, if any words can do justice to the impact COVID-19 has had on life in the UK over recent months. Legal practitioners’ use of the word “unprecedented” during this period is, well… unprecedented but even it doesn’t begin to describe the effect the pandemic has had on businesses across the country. There isn’t an industry or profession that hasn’t been touched by the effects of the pandemic and the legal sector is no different.

On 20 May 2020, the UK Government presented the Corporate Insolvency and Governance Bill (the “Bill”) to the House of Commons. The Bill is being fast-tracked through Parliament, with the aim of completing all stages and becoming law during July 2020. On 3 June 2020, the Bill was passed by the House of Commons and the Bill is now to be considered by the House of Lords, and if approved, it will require Royal Assent before becoming law.

As set out in the first blog in this series, the Corporate Insolvency and Governance Bill (the “Bill”) introduces a new debtor-in-possession moratorium to give companies breathing space in order to try to rescue the company as a going concern.

The Corporate Insolvency and Governance Bill (the Bill) has completed all of its stages in the House of Commons, without material amendment to the Bill as originally drafted. All three readings in the House of Lords are scheduled to take place in June 2020, and expectations are that the Bill will receive Royal Assent, and will be enacted, very shortly thereafter.

Short Read:

Despite the law not yet being in force, the High Court has this week granted an unnamed high street retailer an injunction preventing one of its landlord creditors from presenting a winding-up petition against it on the expectation that the restrictions in the Bill will shortly be enacted.

1. On 4 June 2020 the Chancellor handed down his decision in Re Akkurate Ltd (in Liquidation) [2020] EWHC 1433 (Ch). In doing so he brought to an end (at least for now) an ongoing debate as to whether s236 Insolvency Act 1986 (“IA 1986”) has extraterritorial effect, concluding that he was bound by precedent to conclude that it does not but carving out an exception where the Council Regulation (EC) No 1346/2000 on Insolvency Proceedings applies (“the Insolvency Regulation”). 

The highly anticipated Insolvency and Corporate Governance Bill (the "Bill") was finally published on 20 May 2020. Following its second and third readings in the House of Commons yesterday (3 June 2020), the Bill will now be considered by the House of Lords in the coming days.

The UK Government has published the Corporate Insolvency and Governance Bill (the Bill) that proposes to make both temporary and permanent changes to the UK insolvency laws.