The Corporate Insolvency and Governance Bill introduced new measures which were designed to assist companies facing financial difficulties and the measures are particularly useful during the Covid-19 crisis.
One of the measures is ‘suspension of wrongful trading’. The Bill will temporarily remove the threat of personal liability arising from wrongful trading for directors who continue to trade a company through the crisis with the uncertainty that the company may not be able to avoid insolvency in the future. Liquidators and administrators will not be able to take an action against an insolvent company’s directors for any losses to creditors resulting from continued trading while the wrongful trading rules are suspended. This will remove the pressure on directors to close otherwise viable businesses to avoid potential liability. All the other checks and balances on directors remain in place.
For information on any type of insolvency procedure please call Stella Flemmings on 01377 257788 and she will make you a free appointment at Driffield, Scunthorpe or York, or organise a virtual meeting.