The secretary of state for business, energy and industrial strategy Alok Sharma has brought forwards significant changes to the UK insolvency regime to help businesses that are unable to meet their debts due to the impact of the coronavirus outbreak avoid having to file for bankruptcy.
The changes include a temporary suspension of the wrongful trading rules, which usually make it an offence for a company director to continue to trade if they know the business is unable to avoid going into liquidation.
This measure will allow directors to continue to pay staff and suppliers in order to keep the business going without being personally liable for any ‘breach’ that occurs.
Companies undergoing a rescue or restructuring process will also be able to continue buying essential supplies, such as energy, raw materials or broadband, while their creditors will not be able to put them into administration as they otherwise could have done.
Legislation to allow for the changes is to be brought forward at the earliest opportunity and will, once passed, be backdated to the beginning of March.
Our specialist corporate restructuring and insolvency team can assist with any queries you have about these rule changes. For further information, please contact Neil Harrold at Hay & Kilner Law Firm.
For further information contact Neil Harrold, or call 0191 232 8345.