UK: The Corporate Insolvency and Governance Bill - an update

The Corporate Insolvency and Governance Bill received its first reading in the House of Commons on 20 May and is scheduled to proceed through second reading, committee stage and third reading tomorrow: see here. A copy of the Bill as introduced is available here (pdf). Explanatory notes, to be read alongside the Bill, are available here (pdf). Factsheets have also been published by the Department for Business, Energy and Industrial Strategy: see here.

In broad outline, the Bill will make permanent and temporary changes. The permanent changes include the introduction of a new insolvency mechanism: a moratorium. Among the temporary changes are those relating to filing deadlines, holding general meetings electronically and, in respect of directors' potential liability for wrongful trading under section 214 of the Insolvency Act 1986, to provide that the court is to assume that the director is not responsible for any worsening in the financial position of the company, or of its creditors, between 1 March 2020 and 30 June 2020 (or, if later, one month after the Act comes into force).