Statutory Demands, Winding Up Petitions and Covid 19 – Update
We discussed the detail of the Corporate Governance and Insolvency Act 2020 (CIGA2020) and its effects on the use of statutory demands and winding up petitions in our blog here and the current uncertainty on whether the restrictions would be extended here.
The Government has now bought into force the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) (No. 2) Regulations 2021. The new regulation now in force extends the relevant period until 30 September 2021:
- The prohibition, on presenting a winding up petition based on a statutory served after 1 March 2020;
- The requirement to satisfy the court, for the purpose of presenting a winding up petition based on any other ground, that coronavirus has not had a financial effect on the debtor company, or that the debtor company would be insolvent irrespective of any financial effect of coronavirus;
- Continued suspension of director liability for wrongful trading.
The remaining question is will the vaccination program and other measures being taken, provide sufficient comfort to the Government at the end of June 2021 to see a return to pre pandemic normalcy?
We will continue to keep you updated