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UK government extends some temporary insolvency measures, but not all

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United Kingdom

As announced by the Government on 24 September (see link here):

  • "Statutory demands and winding-up petitions will continue to be restricted until 31 December 2020 to protect companies from aggressive creditor enforcement action as a result of coronavirus related debts"
  • "Termination clauses are still prohibited, stopping suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process. However, small suppliers will remain exempted from the obligation to supply until 30 March 2021 so that they can to protect their business if necessary"
  • "The modifications to the new moratorium procedure, which relax the entry requirements to it, will also be extended until 30 March 2021. A company may enter into a moratorium if they have been subject to an insolvency procedure in the previous 12 months. Measures will also ease access for companies subject to a winding up petition. The temporary moratorium rules will also be extended to 30 March 2021"
  • What is also surprising though, from a review of the amending legislation (The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020, found here), is:
  • There is no extension to the suspension of the wrongful trading provisions which presently expire on 30 September 2020; and
  • Crown Preference remains scheduled to come back into force on 1 December 2020.
For more information on these changes and how they affect you, please contact a member of Fieldfisher's restructuring and insolvency team.

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