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Robin Henry
Partner - Head of Dispute Resolution Services
Real Estate & Commercial real estate & Coronavirus & Corporate recovery, restructuring & insolvency
The temporary insolvency restrictions protections introduced in 2020 after the start of the Covid-19 pandemic are being significantly eased.
The temporary insolvency restrictions protections introduced in 2020 after the start of the Covid-19 pandemic are being significantly eased and replaced by new targeted measures to support, in particular, small businesses and commercial tenants.
The UK Government have introduced changes to the regime for winding-up petitions. These changes will be in effect from 1 October 2021, withdrawing in part some protection for businesses. These changes will be in place until 31 March 2022. The new measures are contained in The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021.
Until 1 October 2021, a winding-up petition could not be presented:
From 1 October 2021 until 31 March 2022, it will be possible again to present a winding-up petition against a company on the basis of failure to satisfy a statutory demand. The creditor will also not have to consider the financial effects of Covid-19 on the debtor.
However, not all restrictions are being removed. So a creditor will only be able to present a petition to wind up a company if the following conditions are met:
The new measures will apply to businesses of any size.
Commercial landlords will continue to be prevented from forfeiting business leases under section 82 Coronavirus Act until 25 March 2022 or until new legislation is introduced to replace it.
The Government is proposing that the current moratorium will be replaced by a Rent Arbitration Scheme designed to ‘ringfence’ arrears relating to periods of enforced closure from March 2020 until restrictions for the commercial rent sector are fully lifted. The proposal is for the ringfenced debt to be dealt with by means of binding arbitration. In addition, before the new legislation takes effect, a Code of Practice will be published setting out ways in which rent arrears may be mitigated through negotiation.
19 October 2021
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Partner - Head of Dispute Resolution Services
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Partner - Head of Dispute Resolution Services
Specialising in Banking & financial disputes, Commercial disputes and Corporate recovery, restructuring & insolvency
Paralegal
Specialising in Commercial disputes and Banking & financial disputes
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