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Changes to insolvency rules to allow firms greater flexibility
Secretary of State for Business, Energy and Industrial Strategy Alok Sharms announced changes to insolvency rules to allow firms “greater flexibility as they face the current crisis”.
“It is crucial when the crisis passes, as it will, we are ready to bounce back,” he said, as he detailed measures to help businesses “emerge intact the other side of the Covid-19 pandemic”.
“These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends whilst ensuring creditors get the best return possible in the circumstances,” he continued.
The new rules will allow companies undergoing restructuring to continue access to supplies and raw materials.
And, he said, there would be a temporary suspension of wrongful trading provisions for company directors to remove the threat of personal liability during the pandemic, which will apply retrospectively from March 1.
“However, to be clear, all of the other checks and balances that help to ensure directors fulfil their duties properly will remain in force.”
