Claims against insolvent companies and individuals

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When a company or an individual enters into a formal insolvency or enforcement process, restrictions may be imposed on the ability of creditors or prospective creditors to continue or bring claims against that insolvent company or individual. This is distinct from the commercial considerations of whether it is worthwhile (economically or otherwise) bringing, or continuing with, a claim against an insolvent opponent.

Corporate insolvency processes

Restrictions on bringing, or continuing with, claims against a company which is in a formal insolvency process apply in administrations, liquidations and, to some extent, company voluntary arrangements (CVAs).

In addition, a moratorium under Part A1 of the Insolvency Act 1986 (IA 1986) is designed to allow viable businesses time to restructure or seek new investment free from creditor action.

There is no formal moratorium during either a restructuring plan under Part 26A of the Companies Act 2006 (CA 2006) or a scheme of arrangement under CA 2006, Pt 26, although parties may agree their own arrangements. Once approved, both restructuring plans and schemes of arrangement bind those affected classes of creditors and/or

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