The Corporate Insolvency and Governance Act 2020 (also referred to as CIGA) introduced measures and procedures to alleviate financial distress on companies due to the coronavirus pandemic and the economic crisis it entailed. The Act came into law on June 26, 2020 after a quick passage through parliament. It introduced permanent “debtor friendly” measures to insolvency and restructuring law in England, which was previously regarded as “creditor friendly”. Prior to CIGA, a criticism of the UK’s restructuring procedures was a lack of “debtor in possession” processes, by which company directors remain in control to implement a restructuring or rescue plan under the benefit of a moratorium (the authorisation for debtors to postpone a payment). CIGA also introduced some temporary measures to help prevent companies from needing to enter insolvency or restructuring procedures, and mitigate the strain of insolvency procedures on directors of businesses struggling as a result of the pandemic. The Act also brought in some extensions to time periods for filing various business documents at Companies House, such as company accounts, to reduce the burden on businesses during the crisis as well as relaxing some requirements around shareholder meetings.
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