Business Insolvency during COVID19
Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy outlined new measures (28 March) to improve the insolvency system providing further legal options for companies running into difficulties.
- Where UK companies are needing a financial rescue package, the objective is to enable them to keep trading – offering “extra time and space to weather the storm” while ensuring that creditors get the best return possible.
- The new rules will make sure companies undergoing restructuring can still get hold of supplies and raw materials.
- Suspending of the wrongful trading provisions for company directors in order to remove the threat of personal liability. This will be backdated to 1 March, but all of the other checks and balances on company directors will remain in force.
- New measures to enable AGMs to go ahead on a more flexible basis – either by postponing, conducting online, or by phone with proxy voting
The above legislation is to be introduced at the earliest opportunity and we will continue to update details here.