In this episode of our Ask the Expert series, Sam Payne, Head of Restructuring and Insolvency, puts the questions you submitted on recent insolvency reforms resulting from or accelerated through due to Covid-19 to partner Robin Koolhoven. They also provide practical steps that you and your business should be taking to minimise your losses and personal exposure.
Conversation topics include (timings are in brackets):
- (00:40) Many household names are said to be in trouble or going under – is this just the start? Do you expect there to be a steeper rise in insolvencies and if so, when?
- (2:30) Which sectors do you think will be worst hit?
- (4:22) CIGA came into effect at end of June – bill that started life over 2 years ago and has been rushed through in the end to help deal with impact on business of Covid-19 – some of the changes are permanent, others temporary – let’s explore.
- (05:41) We were instructed in what we believe was the first Moratorium – can you explain what they are and how they are designed to help businesses?
- (08:21) One of the other permanent introductions is the Restructuring Plan – In what circumstances will these be suitable and why?
- (10:39) There has been a temporary restriction on winding up petitions – will this cause a backlog and will it have a longer term effect? And also, what if Covid-19 has nothing to do with non-payment?
- (17:22) Does the temporary suspension of wrongful trading liability go far enough?
- (22:02) Will the statutory override of insolvency termination provision in contracts simply pass the buck from one struggling company to another? What options are available to companies hit by third party insolvency?