An update on the Corporate Insolvency and Governance Act 2020
In an earlier blog in our series, we highlighted the introduction of insolvency protection measures through the Corporate Insolvency and Governance Act 2020, the aim of which was to prevent a tsunami of company insolvencies as the COVID pandemic impact began to be felt in full force.
Some of the measures contained in the Act, including a moratorium on statutory demands and winding up petitions, are due to come to an end in two weeks’ time which has alarmed the Institute of Directors and pushed them to warn the government to extend the scheme. So far, the government has been silent on this and, despite extending the ban on evicting tenants for non-payment of rent looks set to be extended until the end of the year, there appears to be no movement thus far in relation to the insolvency measures.
However, this does not mean there won’t be an 11th hour intervention as the stark reality of the October ‘cliff edge’ edges closer and a chorus of concerns from business groups reaches a crescendo.
If the measures are not extended, then creditors will again have powerful tools at their disposal for recovering their debts, which they have been denied for many months.
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