Government intervention in the commercial letting market, in response to COVID-19, has continued with the Corporate Insolvency and Governance Act 2020 becoming law on 25 June.
We have updated our June briefing on remedies for unpaid rent to reflect the recent legislative changes, including the extension of the temporary prohibition on forfeiture.
On 26 June 2020, the Corporate Insolvency and Governance Act[1] (the Act) came into force.
The Act has significant implications for supply contracts as it will prevent many suppliers ending existing contracts once a business is insolvent. The Act will make a big impact on existing supply contracts, and will also affect the drafting and negotiation of new contracts.
On 25 June 2020 the Corporate Insolvency and Governance Act received Royal Assent, making some of the biggest changes to UK insolvency laws in the last 30 years. We have written several blogs covering the changes and how they help support distressed businesses, impact suppliers, lenders and other third parties and have tracked the changes through the UK parliament.
The Corporate Insolvency and Governance Act 2020 received Royal Assent and is now in force.
In brief
Introduction
On 20 May 2020, the UK Government published the Corporate Insolvency and Governance Bill (the “Bill”). The Bill was published in response to Covid-19 with a view to assisting companies and directors through these challenging times.
The Corporate Insolvency and Governance Act 2020 (the "Act") obtained Royal Assent on 25 June 2020 and came into effect on 26 June 2020.
The Act is intended to offer protection to businesses that are having difficulties trading due to the current economic downturn and beyond, and generally marks a shift towards a more debtor-friendly regime. The provisions will be relevant to occupational pension schemes.
The Corporate Insolvency and Governance Act 2020 (CIGA) came into force on 26 June 2020, having been fast-tracked through Parliament. Although most of CIGA relates to insolvency law, the Act also makes some temporary changes to company law in the UK. The purpose of these is to give companies greater flexibility to deal with the difficulties caused by COVID-19.
Key changes
On 26 June 2020 the Corporate Insolvency and Governance Act 2020 (the Act) came into force. The Act marks the most significant insolvency reforms in a generation. It doesn’t just deal with measures required to tide companies through the COVID-19 pandemic but includes far-reaching wholesale reforms to the UK’s restructuring toolbox, including the introduction of the restructuring plan, which has the potential to be a gamechanger for restructurings.
There are two temporary measures dealing with COVID-19 impacts on companies specifically:
UK COVID-19 Developments
HMRC updates its trading activities guidance