On 20 May 2020, HM Government published the Corporate Insolvency and Governance Bill 2019-21 (the “Bill”). The Bill is intended to provide businesses with increased flexibility and breathing space to continue trading despite the challenges presented by the new coronavirus (“COVID-19”) pandemic. While some measures have been introduced specifically to support businesses experiencing financial difficulties as a result of COVID-19, other measures contained in the Bill have been in the making for several years.
The Bill proposes a new “standalone” moratorium as well as a new prioritisation of debts following a failed moratorium. The FMLC would like to highlight a few concerns. In addition, given the speed at which the legislation is proceeding through Parliament, the FMLC would recommend the insertion of a “sunset” clause or a provision for a prescribed review by Parliament of the operation of the legislation after a specified period of time.
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