Corporate Insolvency and Governance Act 2020

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Spurred on by the coronavirus (COVID-19) pandemic and a desire to mitigate the effect on businesses of the government-imposed lockdown, the government published the Corporate Insolvency and Governance Bill on 20 May 2020. The Bill received Royal Assent on 25 June 2020, resulting in the Corporate Insolvency and Governance Act 2020 (CIGA 2020).

The government previously consulted on proposed changes to the UK’s insolvency regime in 2016 and published its response on 26 August 2018 (see News Analysis: Exploring the government’s response to the insolvency and corporate governance consultation). See also Practice Note: Reform of UK insolvency laws.

CIGA 2020 largely follows the conclusions set out in the government’s response, together with temporary provisions to mitigate the effect on businesses as a result of the coronavirus lockdown.

The main changes of interest to

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Latest Restructuring & Insolvency News

Insolvency Service reports 11-year director ban for BBL fraud

The Insolvency Service has reported the disqualification of building contractor Tahir Haq from serving as a company director for 11 years, accompanied by mandated compensation payments totalling £58,963 (including interest and costs). Haq obtained a £50,000 bounce back loan (BBL) for Integral Maintenance Team Ltd by overstating his company's turnover by £200,000, despite the company being entitled to only around £3,000. The disqualification, effective from 1 July 2025, prohibits Haq from promoting, forming, or managing any company without prior court approval.

Disputed debt and conversion of members’ voluntary liquidation to creditors’ voluntary liquidation (Noal SCSp and others v Novalpina Capital LLP (in members voluntary liquidation) and others)

Restructuring & Insolvency analysis: This judgment confirms that, if a company in members’ voluntary liquidation (MVL) is unable to pay its debts in full together with interest at the official rate within the period stated in the directors’ declaration made under section 89 of the Insolvency Act 1986 (IA 1986), then the company must be placed into creditors’ voluntary liquidation (CVL). There is no solvency test to justify varying this period. The company is already in liquidation and the liquidator has no discretion with regard to having to act under IA 1986, s 95 to convert the MVL to a CVL. Written by Andrew Mace, barrister at Tanfield Chambers.

Issue 168 of Insolvency Service’s Dear IP published

The Insolvency Service reports that the Information Sharing (Disclosure by the Registrar) Regulations 2024 (SI 2024/1378), effective from 20 December 2024, will enable the Registrar of Companies to disclose non-public information to insolvency practitioners (IPs) and The Financial Conduct Authority has published updated guidance (FG25/2) for IPs handling regulated firms, incorporating Consumer Duty requirements. Following the Pindar Scarborough Ltd (in Administration) [2024] EWHC 908 and Boughey & Anor v Toogood International Transport and Agricultural Service Ltd (in administration) [2024] EWHC 1425 court judgments, the Insolvency Service has revised its interpretation of 'creditor' status in terms of the Insolvency Act 1986 (IA 1986), adopting a context-specific approach rather than maintaining its previous fixed-point definition.

The Supreme Court tweaks Etridge (Waller Edwards v One Savings Bank plc)

Property Disputes analysis: English property law periodically produces epoch-making decisions of the highest court. In years to come, Waller Edwards v One Savings Bank plc may well become such a decision. It enjoys the respectable jurisprudential lineage of three famous House of Lords’ decisions: Barclays Bank v O’Brien, CIBC Mortgages v Pitt, and Royal Bank of Scotland v Etridge, but it also applies established principles in a novel way. Written by Marc Beaumont, Windsor Chambers.

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