Insolvency measures extended to support struggling businessesMarch 31st 2021
The Government has extended its temporary insolvency measures to support businesses struggling during the pandemic.
Sam Lyon Associate Solicitor and Head of Corporate & Commercial provides an update.
The measures were introduced in the Corporate Insolvency and Governance Act in March 2020, including protecting businesses from aggressive creditor enforcement and removing personal liability on company directors.
They are being extended till the end of June 2021. The extension means that:
- Statutory demands and winding-up petitions will continue to be restricted to protect companies from creditor enforcement action due to debts related to coronavirus (COVID-19).
- Small suppliers will not have to continue to supply a business in insolvency. However, larger suppliers will not be able to cease their supply or ask for additional payments while a company is going through a rescue process.
- Entry into a moratorium will remain relaxed and a company will be able to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months. These measures will be extended further than the others until 30 September 2021.
The Minister for Corporate Responsibility, Lord Callanan, said: “We’re extending these important measures to give businesses the extra breathing space they need as we cautiously reopen the economy and look to build back better from the pandemic.
“With the threat of aggressive creditor action and insolvency eased, companies will be able to focus all their efforts on their recovery.”
If you would like further information about the issues raised in this article please contact Sam on 01228 516634 or click here to send him an email.