Dear Colleague,
I am writing to inform you that today the Government has introduced the Corporate Insolvency and Governance Bill in Parliament.
Through this Bill, the Government will put in place a series of urgent measures to amend insolvency and company law to support business resulting from the impact of Covid-19.
This Bill consists of six insolvency measures and two corporate governance measures.
The insolvency measures will provide vital support to businesses to help them through this period of instability.
The corporate governance measures will introduce temporary easements and flexibility to businesses where they are coping with reduced resources and restrictions.
This Bill will do this through:
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introducing a new moratorium to give companies breathing space from their creditors whilst they seek a rescue;
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prohibiting termination clauses that engage on insolvency, preventing suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process;
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introducing a new restructuring plan that will bind creditors to it;
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enabling the insolvency regime to flex to meet the demands of the emergency;
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temporarily removing the threat of personal liability for wrongful trading from directors who try to keep their companies afloat through the emergency;
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temporarily prohibiting creditors from filing statutory demands and winding-up petitions for COVID-19 related debts;
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temporarily easing burdens on businesses by enabling them to hold closed Annual General Meetings (AGMs), conduct business and communicate with members electronically, and by extending filing deadlines; and allowing for the temporary measures to be retrospective from their respective dates of announcement so as to be as effective as possible.
We have been working closely with the Devolved Administrations to ensure that all appropriate measures can apply to the whole of the United Kingdom.
I hope you will support these important and urgent proposals which will help companies to maximise their chances of survival, protect jobs and support the country’s economic recovery.
I am keen to ensure all MPs and Peers have the opportunity to hear more about our proposals and to have any questions and concerns answered. We will be arranging open briefing sessions for MPs and Peers on Thursday 21st and Friday 22nd May.
The Rt Hon Alok Sharma MP
Secretary of State for Business, Energy & Industrial Strategy
