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.
We have just learnt that yesterday (24 March 2021) the Government has laid before parliament the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 (SI 2021/375), due to come in to force tomorrow, the new regulations will extend the relevant period until 30 June 2021 for amongst other purposes:-
- 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