Summary
Intro
The UK insolvency regime has changed. Our earlier alert set out a brief overview of the changes. This is note provides more detail and flags some practical steps that the suppliers of goods and services may wish to consider.
In a nutshell
The High Court in London gave judgment on Friday, 3 July 2020 on the relative ranking of over $10 billion of subordinated liabilities in the administrations of two entities in the Lehman Brothers group.
UK CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020
9 JULY 2020
IN THIS ISSUE:
Permanent Insolvency Changes A New Standalone Moratorium A New Restructuring Plan Ipso Facto Termination Clauses
Temporary Insolvency Changes Modification of Wrongful Trading Liability Statutory Demands Winding Up Petitions Winding Up Orders
Further Changes
Governance Changes Company Meetings Company Filings
Final Thoughts
On the 26 June 2020, The Corporate Insolvency and Governance Act 2020 (the Act) officially came into force, giving companies breathing space to continue to trade through the pandemic and avoid insolvency
Many of these changes will be welcomed by trustees of incorporated charities. Here’s what you need to know for charitable companies and charitable incorporated organisations (CIO's), which are 'eligible bodies' for this purpose:
In a recent virtual speech, Chair of the FCA, Charles Randell observed that some of the debt businesses have incurred in the Covid-19 crisis will become unaffordable and that lenders and regulators will need to tackle this overhang of debt quickly and fairly to prevent it becoming a drag on the economy. With an eye to the past, Mr Randall noted that the industry could not repeat the events of the 2008 crisis where the treatment of some SME customers caused serious damage to the trust in financial services institutions and in some cases to customers themselves.
Even before the advent of Covid-19, insolvency-related D&O claims already made up a large part of the management risk landscape.
Corporate insolvencies are on the rise. 2019 saw the highest level of underlying insolvencies since 2013, with the retail, hospitality and construction industries particularly affected. As the ongoing uncertainty of the pandemic further increases the risk that companies will run into financial difficulties, insolvency can only continue to make up a large source of directors’ and officers’ (D&O) claims.
Introduction