COVID-19 – Update 9 June – New Government Bill to help Indebted Companies

Further to our previous blog on proposed changes to insolvency laws, here is a summary of the Government Corporate Insolvency & Governance Bill which is expected to become law by the end of June.

Moratorium

A new process giving an initial period of 20 business days breathing space from creditors. Whilst directors retain control when entering the moratorium an insolvency practitioner will be appointed as a ‘monitor’.  You can enter by simply filing documents at court, as there is no requirement to obtain consent.

Wrongful Trading

Directors who are trying to keep their company afloat during the crisis will have the threat of wrongfully trading whilst insolvent removed, but care still needs to be taken. All the other checks and balances on directors remain in place.

Creditor action

For COVID-19 related debts, creditors are prohibited from filing statutory demands or winding-up petitions.

Filing deadlines

More time will be given to file accounts, confirmation statements and details of other relevant events.

Find out more

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