On 24 September 2020, the Government introduced an extension to the duration of certain provisions that were originally brought in by the Corporate Insolvency and Governance Act 2020 (“CIGA”) in response to the Covid-19 pandemic. You can see our previous articles about CIGA here:
Major change on the horizon – the Corporate Insolvency Governance Bill (June 2020)
Winding up petitions in Covid-19 – navigating the new obstacles (August 2020)
It is important to note that not all of the temporary measures brought in by CIGA have been extended by the new Regulations, and in particular, the suspension of wrongful trading provisions has not been extended.
The new changes will take effect from 29 September 2020 and will include:
- An extension of the relaxation of company annual general meeting requirements to 30 December 2020 (paragraph 2(1)(b) of Schedule 14 CIGA);
- An extension of the restrictions on the use of statutory demands and winding-up petitions to 31 December 2020 (paragraphs 1(3)(b) and 21(1)(b) of Schedule 10 CIGA). A consequence of this will also be to extend the period during which validation orders are unnecessary for companies which are subject to winding up petitions to 31 December 2020;
- An extension to the modifications to moratorium provisions and temporary moratorium rules to 30 March 2021 (paragraph 1(b) of Schedule 4 CIGA); and
- Extend the small supplier exemption from termination clause provisions (i.e. the new ipso facto rules which would prevent suppliers from terminating their contracts for goods and services on the grounds of insolvency) to 30 March 2021 (section 15(2)(b) CIGA).
The incoming amendments have been introduced by the Department for Business, Energy and Infrastructure and are intended to further help UK companies and other entities during the difficult time that has been caused by the Covid-19 pandemic.
On a related note in respect of property in England, the Government has also announced that, by virtue of the Business Tenancies (Protection from Forfeiture: Relevant Period) Coronavirus) England (No 2) Regulations 2020, the protection from forfeiture for business tenancies in England shall be extended to 31 December 2020. This is not the same for residential properties as the stay on possession proceedings came to an end on 20 September 2020.
If you require any further advice in respect of any of the changes listed above, please contact Sam Payne, or another member of the Restructuring and Insolvency team at HCR.