The House of Lords has completed its consideration of legislation introduced by the Government to give businesses whose survival is impacted upon by COVID-19 the essential breathing space they need to plot a path to sustainable futures.

The Corporate Insolvency and Governance Bill:

• introduces a new 20-day renewable moratorium period, overseen by a Monitor who must be a licenced insolvency practitioner, during which businesses will be protected from creditor action to enable them to seek specialist restructuring advice or a rescue
• includes a new restructuring plan that introduces cross-class cram down to bind creditors to it, even those that vote against it - coupled with important safeguards for affected creditors in these situations, including that a court sanctions the plan as fair and equitable
• extends ‘essential supplies’ rules to companies using a moratorium or other insolvency procedures to prevent suppliers from ceasing service or changing their terms for goods and services they need to continue to trade, ensuring that a rescue is not jeopardised. However, protections are in place to ensure payment for these services and the ability to seek approval to cease supply where this causes hardship
• temporarily suspends parts of insolvency law to support directors to continue trading through the emergency without the threat of personal liability for wrongful trading, and to prevent statutory demands from being served and restricting winding up petitions from being presented until 30 September 2020 if the pandemic is the reason the company is unable to pay its debts. These provisions that can be extended by regulation if necessary
• amends company law and other legislation to provide companies and other bodies with temporary easements on company filing and annual general meeting requirements.

We have published factsheets which provide further detail on these provisions.

The Bill will now return to the House of Commons for its final consideration of amendments made in the House of Lords and is expected to receive Royal Assent and come into force by the end of this week.

The 240-page bill has benefitted considerably from the input of insolvency, creditor, legal and other stakeholders. You can read the blog by our Head of Policy, Paul Banister, on the challenge of drafting the Bill at pace to respond to the unique challenges businesses have experienced as a result of the pandemic.

We have partnered with R3, the trade body for insolvency practitioners, to deliver two webinars to explain different aspects of this new legislation:

• AGMs and filing extensions: Nick Skates, Head of Corporate Transparency at BEIS, will join other experts to outline these provisions at 10.30am on 30 June
• moratoriums, restructuring and winding-up petitions: Paul Banister, Insolvency Service Head of Policy, introduces the legislation and the policy intentions that lie behind it at 10.30am on 7 July

If you are unable to make these sessions, or want to view them again, they will be recorded to enable you to watch them at a time convenient for you.

The role of the monitor

In order to give insolvency practitioners time to prepare to take on the new role of Monitor of a business in a moratorium we have published draft guidance which sets out the principal duties and actions required of them. This guidance will be finalised and reissued once the Bill has completed its passage through Parliament.

Earlier this year we invited feedback to help design the agenda for Insolvency Live! 2020, our annual forum for insolvency and debt advice professionals. It had been our intention to host the event in London in late July as in previous years. Social distancing and travel restrictions now make this impractical and we intend to go ahead with a virtual forum in November. Further details will be provided in the coming months. We would be happy to receive further suggestions for the agenda and you can also ask to be emailed when registrations open by sending us a message to stakeholder@insolvency.gov.uk.