After the Corporate Insolvency and Governance Bill was published on 20 May 2020, it raced through the House of Commons and the House of Lords, coming into force in under six weeks as the Corporate Insolvency and Governance Act 2020, with some of the temporary measures taking effect from 1 March 2020. Although the new tools are entirely untested, the sooner they become an integrated part of the UK restructuring landscape, the better.
The Corporate Insolvency and Governance Bill was recently laid before Parliament. The bill contemplates a temporary ban on statutory demands presented from 1 March 2020 as a ground for presenting a winding-up petition and on winding-up petitions presented from 27 April 2020 unless the petitioning creditor has reasonable grounds for believing that COVID-19 has not had a financial effect on the debtor company or that it would have been insolvent even if COVID-19 had not had a financial effect on it.
The much-anticipated Corporate Insolvency and Governance Bill was published on 20 May 2020. The proposed legislation is split into two broad categories: temporary provisions brought about as a result of COVID-19 and permanent provisions which will result in fundamental changes to UK insolvency law. The proposals, both temporary and permanent, reflect a shift towards a more debtor-friendly regime.