20 May The UK government 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).
New insolvency legislation temporarily bans landlords from making legal claims for rent owed by businesses hit by COVID-19. The move, described by Colin Haig, president of restructuring trade body R3, as the biggest shake-up of insolvency laws for two decades, is designed to head off a rash of coronavirus-induced bankruptcies.
Under the bill, U.K. companies will have access to new tools to restructure their debt in order to keep operating through the crisis.
The rules temporarily suspend wrongful trading provisions, allowing companies to keep operating without the threat of personal liability to directors. They also suspend the use of written warnings from creditors and winding up petitions against companies that are unable to pay their debts due to the impact of the coronavirus crisis. The goal is to protect “otherwise viable companies” from collapse.
In addition, the rules temporarily lift regulatory requirements on the timing of annual general meetings and allow extensions to deadlines for submitting information to Companies House, the government body which deals with the regulation of limited companies.