(3)In this Part a reference to pre-moratorium debts for which a company has a payment holiday during a moratorium is to its pre-moratorium debts that have fallen due before the moratorium, or that fall due during the moratorium, except in so far as they consist of amounts payable in respect of—. may be made on only an application by the directors or the monitor. a statement from the proposed monitor that the company is an eligible company, a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its debts, and. You’ve accepted all cookies. (3)For the purposes of such an application, any reference in section A42(1) or A44(1) to the interests of the applicant is to be read as a reference to the interests of the trustees or managers as a creditor. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. These were originally consulted on between 2016 and 2018 and were fast-tracked to deal with the COVID-19 pandemic. What does the Corporate Insolvency and Governance Act 2020 (CIGA) do? (5)If the company makes a payment to which subsection (1) applies otherwise than as authorised by that subsection—. On 26 June 2020, the Corporate Insolvency and Governance Act (CIG Act) came into force which introduced fundamental changes to the UK’s company and insolvency laws which not only provide temporary assistance to companies and their directors during the Coronavirus Disease 2019 (COVID-19) crisis, but on a permanent basis have significantly bolstered the UK’s restructuring tool kit. all the elements necessary to establish the cause of action exist before the moratorium comes into force except for actionable damage; a liability in tort or delict is a moratorium debt if it does not fall within paragraph (a) and either—, the cause of action has accrued during the moratorium, or. The Corporate Insolvency and Governance Act (CIGA 2020) inserts a new Part A1 into the Insolvency Act 1986 (IA 1986) which provides for a new insolvency process whereby directors of insolvent companies, or companies that are likely to become insolvent, can obtain a 20 business day moratorium period. Where property subject to a floating charge is disposed of under paragraph. Prosecution of delinquent officers of company. any money required to be added to the net proceeds so as to produce the amount determined by the court as the net amount which would be realised on a sale of the property in the open market by a willing vendor. Creditor consent for the purposes of section A11. It came into force on 26 June 2020. (1)This section applies to an eligible company that—, (a)is not subject to an outstanding winding-up petition, and. A creditor or member of a company may apply to the court for an order under this section on the ground that—, during a moratorium, the company's affairs, business and property are being or have been managed by the directors in a manner which has unfairly harmed the interests of its creditors or members generally or of some part of its creditors or members (including at least the applicant), or. Restrictions on insolvency proceedings etc. The overarching purpose of the Act is to protect as many businesses as possible from falling into administration or insolvency as a result of the disruptions and hardship caused by the pandemic. (7)The appropriate regulator is entitled to be heard on any application to the court for permission under section A31(1) or A32(1) (disposal of charged property, etc). (4)In this section eligible scheme has the meaning given by section 126 of the Pensions Act 2004. (c)the payment is required by section A31(3) or A32(3). (d)in a case where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by Article 110 of the Pensions (Northern Ireland) Order 2005, the Board of the Pension Protection Fund. The Secretary of State may by regulations amend this section for the purposes of changing the definition of pre-moratorium debt or moratorium debt in this Part. (1)If a company enters into a transaction to which this Article applies during a moratorium for the company—, (2)A company enters into a transaction to which this Article applies if it—. Revised legislation carried on this site may not be fully up to date. no notice of intention to appoint an administrator of the company under paragraph 14 or 22(1) of Schedule B1 may be filed with the court, no administrator of the company may be appointed under paragraph 14 or 22(1) of Schedule B1, and. In this section the relevant persons means—, Overview and construction of references to payment holidays. (1)During a moratorium, the company may, with the permission of the court, dispose of property which is subject to a security interest as if it were not subject to the security interest. Implications of new moratorium and exclusion of directors' liability in the UK now Corporate Insolvency and Governance Act 2020 becomes law (Updated on June 29, 2020) The Secretary of State may by regulations amend this section for the purposes of adding to the list of documents in subsection (1). (5)Where a question is put to a person in exercise of the powers conferred by paragraph (3), the person’s answer may be used in evidence against them. (3)In deciding whether to give consent under paragraph (1), the monitor is entitled to rely on information provided by the company unless the monitor has reason to doubt its accuracy. (b)apart from that paragraph, the moratorium would end at a time before the application has been disposed of.
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