On 24 September 2020 the government announced an extension to the temporary provisions contained within the Corporate Insolvency and Governance Act 2020 (CIGA 2020).
The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 (‘Regulations’) were laid before the UK Parliament on 24 September 2020 and will come into force on 29 September 2020.
With one notable exception, all the temporary measures have been extended throughout the UK so that they no longer expire on 30 September 2020.
- The following measures are extended until 31 December 2020.
- The prohibition on presenting winding-up petitions based on statutory demands. It is therefore not possible to issue a winding up petition based on a statutory demand served between 1 March 2020 and 31 December 2020.
- The prohibition on presenting winding-up petitions or making winding-up orders is extended until 31 December in all other cases where the debtor is deemed insolvent pursuant to Section 123 of the Insolvency Act, unless the creditor can satisfy the court that the reason for non-payment in not coronavirus related.
- The relaxation of the conditions for the holding of annual general and other meetings of companies and other "qualifying bodies" in Schedule 14 to CIGA 2020 has been extended to 30 December 2020.
- The following measures are extended until 30 March 2021:
- The temporary insolvency rules on procedural aspects of the Part A1 moratorium, contained in Schedule 4 to CIGA 2020.
- The waiver of the requirement that a UK company seeking a Part A1 moratorium must use a court application if they are subject to a winding-up petition.
- The prohibition on entities authorised to hold client money from obtaining a Part A1 moratorium.
- The relaxation of the requirement that a company seeking a Part A1 moratorium is likely to be rescued as a going concern as a result, where its potential failure is due to coronavirus.
- The relaxation of the requirement that a company seeking a Part A1 moratorium has not been in an insolvency procedure or Part A1 moratorium in the previous 12 months.
- The temporary exclusion of small suppliers from the effect of the restrictions on terminating supply contracts for insolvency under Section 233B of the Insolvency Act 1986.
- The provisions relating to the suspension of wrongful trading in Section 12 of the CIGA 2020 have not been extended. This means that directors can be found liable for wrongful trading in respect of conduct after 30 September 2020 where the company subsequently enters liquidation or administration. This will make planning extremely challenging for directors as lockdown measures continue and the future for many businesses remains uncertain.
