On Wednesday 20 May, the Government published the highly anticipated Corporate Insolvency and Governance Bill (the “CIGB”). It legislates for the landmark changes to the UK’s corporate insolvency regime and the temporary suspension of the statutory provisions on wrongful trading announced by the Business Secretary on 28 March 2020 (see Weil’s European Restructuring Watch update of 30 March 2020).
The CIGB, designed to give companies a “breathing space”, is being fast tracked and will introduce into law the following, some of which follow to a certain degree the proposals first announced by the Government in August 2018 (as discussed in Weil’s European Restructuring Watch update on 7 September 2018):
I. Moratorium: to provide a breathing space for eligible companies to seek the rescue of the company as a going concern
II. Arrangements and reconstructions for companies in financial difficulty: the introduction of a new restructuring plan as an additional rescue process
III. Temporary prohibitions of winding-up petitions
IV. Temporary suspension of wrongful trading liability for directors
V. Prohibition on enforcement of supplier insolvency termination clauses
VI. Meetings and filings: the temporary extension of time periods and providing information to the companies registrar
We shall release a detailed overview of the Bill within the coming days, but in the meantime we set out below a high level summary of the proposals.