On 28 March 2020 the UK government announced new insolvency measures to mitigate the effects of COVID-19 on businesses.
The government have already announced a series of wide-ranging policies to try to prevent the downturn created by the pandemic from turning into a recession, including a three-month extension period for filing company accounts (announced on 25 March 2020) and a job retention scheme including provisions regarding ‘furlough leave’ (announced on 26 March 2020).
As part of the new measures to help companies during this period, on Saturday 28 March 2020 the Business Secretary, Alok Sharma, announced that:
- There would be a temporary moratorium for businesses undergoing a restructuring process during which they cannot be put into administration by creditors. This would include protection of supplies to enable companies to continue trading during the moratorium; and
- There would be a temporary suspension of wrongful trading laws for the duration of the pandemic, to be applied retrospectively from 1 March 2020 for three months.
If you would like any further information on any of the above, or would like to discuss your particular circumstances and how Knights could help, please contact a member of our Restructuring & Insolvency team.