A New ‘Chapter’ For Insolvency Law

The Corporate Insolvency and Governance Act (CIGA) received royal assent on 25 June, The Law Society Gazette reported. The Insolvency Service described it as ‘the largest change to the UK’s corporate insolvency regime in more than 20 years… [with] new corporate restructuring tools and temporary easements to give distressed businesses the breathing space they need to get advice and seek a rescue’. CIGA suspends directors’ liability for wrongful trading; it also restricts the use of debt recovery tools such as statutory demands and winding-up petitions for when a company cannot pay its bills (including rent to a landlord) due to the shutdown. These temporary provisions will stay in place until at least the end of September and most are retrospective to 1 March. Robert Russell, head of UK restructuring at DLA Piper, says the act ‘formalises’ what had already been announced in the daily Number 10 briefings in March and April. Read more