Event | Webinar

Changes in UK Insolvency Law - What Do Corporates Need to Know?

Region: Europe
2 July 2020

The Corporate Insolvency and Governance Bill is currently going through Parliament, with it anticipated to become law later in June. The Bill represents the biggest overhaul of the UK’s insolvency legislation for over 30 years. Understanding the changes are just as important for businesses that are not in distress, as those that are. The Bill introduces new measures that could impact your customers, suppliers and third parties you engage with including:

  • A new Corporate Moratorium. This is a stand-alone “debtor–in-possession” moratorium which most companies can seek the benefit of without prior engagement with key stakeholders. Once in place it will prohibit enforcement and recovery action by creditors. The moratorium lasts for an initial 20 business days although it can, in some cases, be extended up to 12 months. What impact might this have on your business if your customer seeks a moratorium?
  • The Restructuring Plan. A sibling to the current Schemes of Arrangement but for distressed companies and with the benefit of potentially being able to bind dissenting classes of creditors. If you are a creditor of the business how does this work, what rights do you have and what impact might it have on your business?
  • A prohibition on insolvency termination clauses - the so called “Ipso Facto” regime. For your business, this might mean that you could be obliged to continue to supply your customer even if they are in insolvent. What is the impact of this and how can your business mitigate against that?
  • Temporary Changes. The Bill also introduces temporary changes relaxing wrongful trading provisions, and prohibiting most statutory demands and winding-up petitions. Understand how this will restrict how your business might recover its debtor book.

Our webinar will be hosted by key members of our Restructuring & Insolvency team: John Alderton, Russ Hill, Rachael Markham, Mark Prior and Devinder Singh, who will help answer these and any other questions you may have about the impact of these changes on your business.

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