The Corporate Insolvency and Governance Act 2020, the increase in the prescribed part and reintroduction of Crown preference—key issues and discussion points for lenders

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • The Corporate Insolvency and Governance Act 2020, the increase in the prescribed part and reintroduction of Crown preference—key issues and discussion points for lenders
  • An introduction to the legislation
  • Corporate Insolvency and Governance Act 2020
  • Other legislation
  • CIGA 2020—Temporary coronavirus measures
  • Temporary suspension of winding up petitions
  • Other temporary measures
  • CIGA 2020—Permanent measures—Termination (ipso facto) clauses
  • CIGA 2020—Permanent measures—Stand-alone moratorium procedure
  • CIGA 2020—Permanent measures—Restructuring plan
  • More...

The Corporate Insolvency and Governance Act 2020, the increase in the prescribed part and reintroduction of Crown preference—key issues and discussion points for lenders

An introduction to the legislation

Corporate Insolvency and Governance Act 2020

Expedited by the coronavirus (COVID-19) pandemic, the Corporate Insolvency and Governance Act 2020 (CIGA 2020) was introduced to the House of Commons on 20 May 2020 and received royal assent on 25 June 2020. Most of its provisions are in force from 26 June 2020.

The aim of CIGA 2020 is to promote a rescue culture to ensure companies in financial difficulties have greater opportunities to restructure and avoid formal (more often than not, terminal) insolvency processes during the coronavirus crisis and beyond. It is therefore a comparatively debtor friendly piece of legislation. It legislates for temporary measures announced by the government as part of its coronavirus response but, more significantly, it introduces permanent new tools into the UK corporate insolvency and restructuring framework.

In this Practice Note, we provide summary information on the changes to insolvency and restructuring law set out in CIGA 2020 with a view to drawing out key issues and discussion points for lenders and provide further reading links for those wishing to dig into the detail of the new legislation. For an overview, see: News Analysis: Corporate Insolvency and Governance Act 2020 and Corporate Insolvency and Governance Act 2020—overview.

The

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