Eleanor Temple, chair of insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, responds to the publication of the Corporate Insolvency and Governance Bill:
“This Bill represents the biggest change to the UK’s insolvency and restructuring framework for almost twenty years. Having called for corporate insolvency reforms since 2016, we welcome the introduction of the Bill to Parliament.
“The measures contained in the Bill will support the profession’s efforts to help businesses navigate the enormous economic damage caused by the pandemic – this legislation comes not a minute too soon.
“The new tools will add to the options available to insolvency and restructuring professionals trying to rescue businesses, and will enhance the UK’s globally recognised insolvency and restructuring framework.
“We are also pleased our feedback on the draft proposals has been taken on board by the Government. Previously, for example, the moratorium would only have been open to solvent businesses, but now the legislation will enable insolvent businesses to obtain a breathing space to review their options, free from the risk that a creditor may push the company into an insolvency procedure prematurely. This greatly increases the number of struggling but potentially viable businesses who could benefit from a vital breathing space, and will help to repair the economic devastation caused by the pandemic.
“We appreciate that in producing this Bill, the Government has condensed a process that usually takes more than year into just a few weeks. The profession will therefore be keen to examine the detail of the legislation, but overall, will welcome this positive step forward.”