The Government’s proposals for reforming the corporate insolvency and corporate governance landscape, published over the August bank holiday, will see the biggest changes to the UK’s insolvency landscape since the 2002 Enterprise Act.
The proposals include new business rescue tools, procedures and measures to ensure greater director accountability.
Highlights of the proposals are
• The introduction of a new moratorium to help business rescue. This will give financially distressed companies a period of time during which creditors cannot take enforcement action, allowing the company to make preparations to restructure or seek new investment;
• Prohibition of enforcement by a supplier of termination clauses in contracts for supply of goods and services on the grounds that a party has entered a formal insolvency procedure, the new moratorium or the new restructuring plan;
• Creation of a new court-based restructuring tool which would include the ability to bind dissenting classes of creditors who vote against it.
The proposals are presently out for consultation and we look forward to considering the finalised details in early course
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