Q&As

How wide is the temporary ban on the use of statutory demands and winding-up petitions to chase outstanding debts from tenants?

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Produced in partnership with Stephen Dillion and Farhana Young of Gosschalks
Published on LexisPSL on 21/05/2020

The following Restructuring & Insolvency Q&A produced in partnership with Stephen Dillion and Farhana Young of Gosschalks provides comprehensive and up to date legal information covering:

  • How wide is the temporary ban on the use of statutory demands and winding-up petitions to chase outstanding debts from tenants?

How wide is the temporary ban on the use of statutory demands and winding-up petitions to chase outstanding debts from tenants?

On 23 April 2020, the UK government announced it would legislate to temporarily ban statutory demands and winding-up petitions. This was supplemented by a press release last updated on 25 April 2020. While this announcement does not yet have legislative effect, the government has confirmed that the ban on statutory demands will be back-dated from 1 March 2020 and last until 30 June 2020. The ban on winding-up petitions will apply to those presented between 27 April 2020 and 30 June 2020. The ban applies to those based on the debtor’s inability to pay its debts due to coronavirus (COVID-19). The measures are due to be included in the Corporate Insolvency and Governance Bill, expected imminently.

The restrictions expressly state they apply to statutory demands to and winding-up petitions against:

  1. companies; that are

  2. tenants of commercial premises; who

  3. cannot pay their rent due to the coronavirus

However, there are a large number of gaps and ambiguities in the above restrictions as set out in the press release (the only HM Government guidance to date):

  1. it seems that the restrictions will not apply where the tenant’s inability to pay is not caused by the coronavirus. In its ‘Notes to Editors’ section, the press release suggests that there

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