The UK Business Secretary Alok Sharma announced on Saturday 28 March that the UK Government plans to introduce new insolvency restructuring procedures. The new legislation will implement the plans, including a short moratorium or ‘breathing space’ that will give companies in 
difficulty time to explore options for rescue.
Current insolvency rules stipulate directors of limited liability companies can become personally liable for business debts if they continue to trade when uncertain about whether their businesses can continue to meet their debts.
Current insolvency rules stipulate directors of limited liability companies can become personally liable for business debts if they continue to trade when uncertain about whether their businesses can continue to meet their debts.
Relaxation of these wrongful trading rules will reassure directors that the difficult decisions they have to make about the future viability of their business will not have to be unduly influenced by the exceptional circumstances which are entirely beyond their control, such as
Covid 19.
Headlines include:
- A pre-insolvency moratorium, or breathing space within which creditors will be unable to take enforcement action
Supply line protection facilitating trade during the moratorium
- A new form of restructuring plan
- Temporary suspension of wrongful
Headlines include:
- A pre-insolvency moratorium, or breathing space within which creditors will be unable to take enforcement action
Supply line protection facilitating trade during the moratorium
- A new form of restructuring plan
- Temporary suspension of wrongful
trading provisions.
Legislation to introduce these changes will be introduced in Parliament at the earliest opportunity. Provisions will be included to enable the changes to be extended if necessary.
Legislation to introduce these changes will be introduced in Parliament at the earliest opportunity. Provisions will be included to enable the changes to be extended if necessary.
