The Corporate Governance and Insolvency Bill

May 21, 2020 10:27 am Published by

Government introduces legislation to relieve burden on businesses and support economic recovery

The government has introduced the Corporate Governance and Insolvency Bill in Parliament, which will put in place a series of measures to amend insolvency and company law to support business to address the challenges resulting from the impact of coronavirus (COVID-19).
 
The Bill consists of 6 insolvency measures and 2 corporate governance measures.
 
Read more via the government website
 
This Bill will do this through:
 

  • introducing a new moratorium to give companies breathing space from their creditors while they seek a rescue
  • prohibit termination clauses that engage on insolvency, preventing suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process
  • introducing a new restructuring plan that will bind creditors to it
    enabling the insolvency regime to flex to meet the demands of the emergency
  • temporarily removing the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the emergency
  • temporarily prohibiting creditors from filing statutory demands and winding up petitions for coronavirus related debts
  • temporarily easing burdens on businesses by enabling them to hold closed Annual General Meetings (AGMs), conduct business and communicate with members electronically, and by extending filing deadlines
  • allowing for the temporary measures to be retrospective so as to be as effective as possible

 

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This post was written by Adrian Smart

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