One of these is the introduction of the Corporate Insolvency and Governance Bill. This is currently making its way through the House of Commons. The Bill consists of 6 insolvency measures and 2 corporate governance measures to address issues caused by the present Covid-19 crisis.
The insolvency measures are designed to provide support to businesses to help them through this period of economic instability and uncertainty.
Please note that these measures are intended to be temporary but given the huge impact of Covid, who knows how long they will remain in place. They obviously have huge ramifications for the way businesses can be run and for those who may be owed money or are currently suppliers. You should make yourself aware of the Bill’s details as soon as you can.
Some of the main measures of the Bill are as follows (and we acknowledge the help from the recent Companies House release in outlining these measures).
- introducing a new moratorium to give companies breathing space from their creditors.
- prohibit termination clauses. These are designed (rather controversially) to prevent suppliers from ceasing their supply or asking for additional payments whilst a company is going through a rescue process.
- introducing a new restructuring plan that will bind creditors to it. This will flex according to 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. How that is defined could be very interesting given the challenges already in the legal domain over how the Insurance sector is dealing with the definition of Covid-19 events.
- 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. We will await to see what they actually looks like when put in place!
As you can see the implications of this Bill are huge for anyone involved in the business sector at present. rhw provide general business advice as well as specialised corporate legal advice.
If we can help you with preparing for the introduction of this Bill or on any other matter, including dispute resolution, please contact our friendly and professional teams.
Email firstname.lastname@example.org or call rhw Solicitors on 01483 302000