5th October 2020
The Corporate Insolvency and Governance Act 2020 that was announced in April 2020 became law after its progress was accelerated through the House of Commons and House of Lords on 25 June 2020. Many of its temporary provisions extended until 30 September 2020. However, this ‘end date’ has now been changed by ‘extension regulations’ made on 24 September 2020.
Key provisions of the act have been amended by these regulations. To recap:
These changes affect business and not individuals which were unaffected by the reforms and new procedures established in June 2020. They also follow on from other extensions that limited the exercise of landlords’ rights including:
Many businesses are now facing further concerns as they re-adjust to further restrictions and added costs. The level of support has changed and is reducing. We can expect there to be a more targeted approach to any ongoing support but also less of a general safety mat for directors to look to.
There are already mounting concerns about issues around assertions about the possible misuse – accidental or not – of some of the schemes and issues will arise from directors’ conduct in any distressed scenario.
Whether you are a director, secured or unsecured creditor, supplier, shareholder or guarantor of a business that may be facing or may face financial strain, this new legislation will affect your options. Thrings continues to work with clients to enable them to face changes to their business that arise and, where necessary, adapt their plans to reflect this new legislation.
Note: Nothing in this article constitutes legal advice and we are not liable for any reliance on the information provided. This is a rapidly changing subject, and whilst correct at the time of writing, circumstances may have changed since publication.