Corporate Insolvency and Governance Act 2020—temporary changes to corporate statutory demands and winding-up petitions

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Corporate Insolvency and Governance Act 2020—temporary changes to corporate statutory demands and winding-up petitions
  • What is the background to the changes?
  • The Corporate Insolvency and Governance Act 2020
  • What are the changes to winding-up petitions, and what do they mean in practice?

Corporate Insolvency and Governance Act 2020—temporary changes to corporate statutory demands and winding-up petitions

What is the background to the changes?

The coronavirus (COVID-19) pandemic and resulting lockdowns and social distancing measures introduced by the UK government have had a profound effect on businesses and the economy. On 20 March 2020, the government announced that businesses including restaurants, pubs and leisure centres must close, and on 23 March 2020 a full lockdown was introduced, sending huge parts of the private sector into hibernation. The forced closure of businesses has threatened the financial health of many previously successful companies, while for those already struggling it has proved to be the tipping point.

In order to mitigate the economic consequences of coronavirus and keep the economy on life support, the government introduced a range of measures, from financial support initiatives to legislative reform. For further details of the financial support available, see Practice Note: Coronavirus (COVID-19)—summary of government support.

In order to protect commercial tenants, the government announced its intention to prohibit landlords from taking steps to forfeit a lease on the grounds of non-payment of rent and other sums falling due under the lease. In response, some landlords sought to petition for the tenant company’s winding up instead and so on 23 April 2020 the Business Secretary announced further measures to protect commercial tenants from these ‘aggressive’ rent-collection strategies

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