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Governance: CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020 - SOUNDBITE SERIES (UK)

03 August 2020 | London
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Welcome to our soundbite series on the new Corporate Insolvency and Governance Act 2020 which came into effect on 26 June 2020.  The provisions of the Act are complex and could have significant impact on companies in distress and their creditors, particularly landlords, suppliers, financial services providers and pension schemes.  Our UK restructuring team have produced a series of short, informative and user-friendly webcasts focussing on a number of the key aspects to help you better understand the implications of the Act and how it may affect your business.

General overview of CIGA
The Corporate Insolvency and Governance Act 2020 commenced into effect on 26 June 2020. While the final provisions of the Act largely reflected the drafting of the original Bill, certain amendments were made including the introduction of a new moratorium and restructuring plan; temporary measures such as wrongful trading provisions; and changes to termination clauses. This overview sets the scene for our tutorial series where we consider each of the finalised Act’s reforms in more detail.

Temporary measures
Wrongful trading, statutory demands and winding up are the subject of this tutorial in our series focusing on the Corporate Insolvency and Governance Act 2020. (Please note that on 24 September 2020 restrictions to statutory demands and winding up were extended to 31 December 2020.)

The restructuring plan
The new restructuring plan outlined in the Act is the focus of this tutorial by restructuring lawyer, Stephen Conyers, who examines the scope of this new process and how it might work in practice.

The moratorium
Restructuring partner, Kevin Pullen, will explain the key features of the new company moratorium introduced under the Act. He will talk through how the moratorium prevents legal processes against the company; how Directors retain management control in practice and the mechanics of payment holidays, liabilities and super-priorities.

Supplying to a company in an insolvency process
John Whiteoak, Global Joint Head of our restructuring team will explain the changes to contractual clauses and their affect on the supply chain. He will discuss how these reforms are likely to impact all companies, whether in financial distress or not, and the relationship between contractual counterparties as companies attempt to trade through this crisis.

Implications for landlords
The focus of this tutorial is the new debtor-in-possession insolvency procedure introduced for the first time under English Law, and how it could significantly impact the recovery for landlords. We examine how the new regime could affect both the approach landlords take to potential restructuring situations and the distributions they may obtain in those restructurings.

Financial institutions: Implications and considerations
In this tutorial, restructuring partner Natasha Johnson focusses on the likely implications of the Act for financial institutions and in particular, commercial banks. She will discuss the new debtor-in-possession insolvency procedure and the new restructuring plan, which includes a cross-class cram down ability and what super-priority to certain pre-moratorium unsecured debts will mean for financial institutions.

Implications for defined benefit pension schemes and the PPF
The Corporate Insolvency and Governance Act 2020 has significant implications for defined benefit pension schemes and the PPF. John Whiteoak, restructuring partner, and Tim Smith, pensions professional support lawyer discuss the main issues for trustees, sponsors and the PPF.

 

Key Contacts

If you have any questions, or would like to know how this might affect your business, phone, or email these key contacts.

John advises on a broad range of general commercial litigation matters, including cross-border disputes, and leads our contentious restructuring group in London.

Key Services
Commercial Litigation
Restructuring, Turnaround and Insolvency
+44 20 7466 2010
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Kevin is Partner in the restructuring and insolvency group at Herbert Smith Freehills.

Key Services
Restructuring, Turnaround and Insolvency
Finance
Key Sectors
Infrastructure
Banks and other Financial Institutions
+44 20 7466 2976
Read more

Natasha is a partner in the dispute resolution team in our London office. 

Key Services
Restructuring, Turnaround and Insolvency
Dispute Resolution
Key Sectors
Banks and other Financial Institutions
Professional Support and Business Services
+44 20 7466 2981
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John is a restructuring lawyer based in our London office.

Key Services
Finance
Restructuring, Turnaround and Insolvency
Key Sectors
Banks and other Financial Institutions
Energy
+44 20 7466 7548
Read more

Andrew is a Senior Associate specialising in commercial, corporate and restructuring litigation.

Key Services
Commercial Litigation
Restructuring, Turnaround and Insolvency
Key Sectors
Banks and other Financial Institutions
Financial Buyers
+44 20 7466 7566
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Steve is a restructuring and insolvency lawyer based in our London office. 

Key Services
Restructuring, Turnaround and Insolvency
Finance
Key Sectors
Banks and other Financial Institutions
Infrastructure
+44 20 7466 2649
Read more

Tim's role involves pensions know-how and policy, thought leadership and client training.

Key Services
Pensions and Pensions Litigation
Employment, Pensions and Incentives
+44 207 466 2542
Read more

Legal Notice

The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.

© Herbert Smith Freehills 2020