The Corporate Insolvency and Governance Bill has now been laid before Parliament and while there is no date as yet for enactment, it is hoped that the new measures will be available from the beginning of July 2020.
The first of the new measures is the Company Moratorium.
This will provide struggling businesses a formal breathing space to pursue a rescue plan during which time no legal action can be taken against a company without leave of the court.
This measure will give businesses a 20-business day opportunity to consider a rescue plan, extendable to 40 business days, with further extensions at the agreement of the creditors or the court.
The company will remain under the control of its directors during the moratorium but the process will be overseen by a monitor who must be a licenced Insolvency Practitioner.
The hope and aim for the Company Moratorium is that the breathing space provided will allow many more companies to be rescued as a going concern and it may result in a significant increase in the amount of CVAs being used by companies.
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