The government’s decision to extend the ban on winding-up orders will give struggling businesses a further – and possibly final – window to plan for their survival when emergency measures end, a North West debt expert has warned.
The announcement yesterday is designed to protect companies with pandemic-related debts from enforcement action by creditors. It means that restrictions on the use of statutory demands and winding up petitions will remain in place until 30 September.
Allan Cadman, who is North West chair of the insolvency and restructuring trade body R3, says many companies will welcome the news, especially given the delay in easing the lockdown.
He says: “Trading conditions have improved recently, but the Prime Minister’s decision to delay the removal of the final lockdown measures underlines that we’re still in choppy economic waters.
“While the extension of these measures will benefit many companies, as time goes on the Government will need to consider the impact on creditors – who have staff and overheads to pay themselves. Balancing these interests is a difficult task for the Government.”
Allan, who is also a partner at insolvency firm Poppleton & Appleby, says it is vital that companies facing debt problems now need to plan for the future. “The decision gives directors and business owners a further – and possibly final – window to plan how they will take their businesses forward when these temporary measures end.
“We urge them to use this time to seek advice from a qualified professional – and to do so as early as possible, so they can benefit from the broadest range of options available and have a greater time period to decide how they will move forward.”