The Corporate Governance and Insolvency Bill has now been introduced in Parliament.
The Bill consists of six insolvency measures, and two on corporate governance. The government is hoping the Bill will give businesses the flexibility they need to cope with reduced resources and restrictions. It will do this by:
- Introducing a new moratorium to give companies breathing space from their creditors while they seek a rescue.
- Prohibit termination clauses that engage on insolvency, preventing suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process.
- Introducing a new restructuring plan that will bind creditors to it.
- Enabling the insolvency regime to flex to meet the demands of the emergency.
- Temporarily removing the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the emergency.
- Temporarily prohibiting creditors from filing statutory demands and winding up petitions for coronavirus related debts.
- Temporarily easing burdens on businesses by enabling them to hold closed Annual General Meetings (AGMs), conduct business and communicate with members electronically, and by extending filing deadlines.
- Allowing for the temporary measures to be retrospective so as to be as effective as possible.