Government set to extend business support measures
23rd June, 2021
Last year the Government introduced certain temporary insolvency measures to support and protect businesses from creditor enforcement where the debt relates to the coronavirus pandemic.
The measures were introduced in the Corporate Insolvency and Governance Act and have been extended on a number of occasions.
These measures are set to be extended once again for a further three months until 30 September 2021.
The result of this for creditors is two-fold:
- Winding up petitions can only be presented in limited circumstances; and
- During this period a statutory demand cannot be relied upon to form the basis of a winding up petition.
The test as to whether a creditor can still present a winding up petition during the restrictions is based on two key criteria:
- the company has not been financially effected by coronavirus, and
- the company would be in financial difficulty irrespective of coronavirus.
There are still a number of options available to creditors to recover debts. Please don’t hesitate to get in touch with us to discuss whether your case is suitable to present a winding up petition or if an alternative method of recovery is more appropriate.
Creditors need to be very cautious and we recommend you contact one of our team to discuss your options in more detail.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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