On May 20, 2020, the UK Government published its much anticipated draft legislation (the Corporate Governance and Insolvency Bill) which aims to provide greater opportunities for company survival and better returns for creditors during and after the COVID-19 emergency. The Government intends to ask Parliament to expedite progress of the Bill.

If enacted in its current form, the Bill will introduce greater flexibility into the UK’s insolvency regime, allowing companies breathing space to explore options for rescue while supplies are protected, so that they have the maximum chance of survival. It will also temporarily suspend parts of insolvency law to support directors to continue trading through the COVID-19 pandemic without the threat of personal liability, and to protect companies from aggressive creditor action.


Continue Reading UK Government Publishes UK Restructuring and Insolvency Law Reforms

On March 28, 2020[1], the UK Government announced that it will introduce new legislation extending the UK’s existing restructuring and insolvency laws to include:

  • a new company moratorium to give companies a breathing space from creditors while they seek to rescue or restructure;
  • protection of supplies to enable companies to trade during the moratorium; and
  • a new restructuring plan, binding on creditors.

The Government previously consulted on these changes in 2018 (the Consultation) but did not introduce them[2]. (In the Consultation it was proposed that: the moratorium would be standalone procedure, preventing the enforcement of security, legal proceedings and creditor action; supplies would be protected by prohibiting reliance on contractual termination clauses based solely on insolvency events; and the new restructuring plan would be based upon the existing scheme of arrangement but with cross-class cram-down available as a means of binding dissenting creditors.)


Continue Reading UK Government Announces Amendments to UK Insolvency Laws to Give Companies and Directors a Breathing Space While They Explore Rescue and Restructuring Options