Wed, 31 Mar 2021
CIGA 2020 Update- Further extension of restrictions on winding-up and suspension of wrongful trading liability to 30 June 2021; temporary Part A1 moratorium rules extended to 30 September 2021
The following provisions of the Corporate Insolvency and Governance Act 2020 (CIGA 2020) that were due to expire in March and April 2021 will now expire on 30 June 2021:
- The suspension of wrongful trading liability under section 12 of CIGA 2020. This had previously been set to expire on 30 April 2021.
- The restrictions on presenting winding-up petitions and on winding-up orders under Schedule 10 to CIGA 2020. These had previously been set to expire on 31 March 2021.
- The exclusion of small suppliers from the prohibition on terminating a supply contract for the customer’s insolvency under section 15 of CIGA 2020. This had previously been set to expire on 30 March 2021.
The following provisions of CIGA 2020, which had been set to expire on 30 March 2021, are now extended until 30 September 2021. Like the winding-up and small supplier provisions listed above, they are extended on the grounds that they reasonably mitigate an effect of coronavirus (section 41(1)(b), CIGA 2020). These are:
- The temporary rules supporting the Part A1 moratorium process in Schedule 4 to CIGA 2020.
- The waiver of the requirement that a UK company seeking a Part A1 moratorium must use a court application if they are subject to a winding-up petition.
- The relaxation of the requirement that a company seeking a Part A1 moratorium has not been in an insolvency procedure or Part A1 moratorium in the previous 12 months.
Please click here to view full report as published by parliament.