Corporate Insolvency and Governance Act

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Law - UK - insolvency - COVID-19.

The UK's Corporate Insolvency and Governance Act 2020 was enacted in response to COVID-19.

It also accelerated a number of other reforms to UK insolvency law.

Among other changes, the Act:

  • Introduced a credit moratorium for businesses, to give them more time to seek a rescue.
  • Prohibited termination clauses engaging on insolvency, to prevent suppliers ceasing supply or asking for additional payments while companies enter rescue proceedings.
  • Introduced a new business restructuring plan procedure.
  • Temporarily removed the threat of personal liability for wrongful trading for directors seeking to keep companies afloat during the crisis.
  • Temporarily prohibited creditors from filing statutory demands or winding up petitions for COVID-19 related debt.

The temporary measures were orginally scheduled to end on 30 September 2020.

They were subsequently extended to 31 December 2020 or 30 March 2021, depending on the measure.

See also