In this article, Catherine Addy QC, Rebecca Page, Rosanna Foskett and Rowena Page examine the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 (“CIGA Extension Regulations 2021”) which came into force on, 26 March 2021, and further extend the suspension of wrongful trading liability - almost a year since the Government announced, on 28 March 2020, the range of measures aimed at protecting companies affected by COVID-19 and their directors, as they tried to steer businesses through the choppy waters which were then anticipated to

It is a sad but inevitable fact that shutting down large sectors of the economy will lead to more insolvencies, both corporate and individual. The Insolvency and Companies Court certainly envisages that it is going to be busy, and this inevitably coincides with corresponding constraints on the Court’s ability to deal with the influx. Hence the need for the Temporary Insolvency Practice Direction (‘the Temporary IPD’), which came into force on 6 April 2020.1

There may now be little time for the voluntary re-scheduling of lease payments due on and after the June 2020 quarter day. Andrew Walker QC explores the reasons why. 

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”). 

Wrongful trading laws have been suspended. But other relevant laws remain unchanged. Critically directors remain subject to the creditors’ interest duty. Read our article which examines the current position and highlights other key issues to be kept firmly in mind by directors and those advising them in these challenging times.