1. Law and finance.
A legal authorisation postponing for a specified time the payment of debts or obligations.
The purpose is to give the debtor time to re-organise their operations appropriately during the moratorium.
- Moratorium gives distressed companies temporary relief
- Among other measures the Corporate Insolvency and Governance Act 2020:
- Introduces a new moratorium to give companies breathing space from their creditors while they seek a rescue.
- Temporarily prohibits creditors from filing statutory demands and winding up petitions for COVID-19 related debts.
- Prohibits termination clauses that engage on entering an insolvency procedure, entering the new moratorium or beginning the new restructuring plan procedure. It will also prevent suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process.
- Temporarily removes the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the emergency."
- From UK Government Corporate Insolvency and Governance Bill 2020: factsheet.
2. Law and finance.
A temporary suspension of creditors' usual rights in relation to unpaid debts.
Voluntary arrangements having similar effects.
Any suspension of usual activities or arrangements.
For example, a moratorium on fishing or hunting endangered species.