corporate insolvency and governance act 2020 moratorium

(1)During a moratorium, the company may dispose of its property only if authorised by paragraph (2) or (5). If a person other than a regulator applies to the court under section A39(3), A42(1) or A44(1) the appropriate regulator is entitled to be heard on the application. at any time, the directors make a proposal under Part 1 (company voluntary arrangements), and. The Corporate Insolvency and Governance Act 2020 makes the most significant changes to UK insolvency law in a generation. (3)The Scottish Ministers may by regulations make provision under the law of Scotland—, (a)to modify this Part as it applies in relation to a company that is a social landlord registered under Part 2 of the Housing (Scotland) Act 2010 (asp 17), or. During the moratorium, the holder of the floating charge may not give any notice which would have the effect of—, causing the floating charge to crystallise, or. Chapter 8 contains miscellaneous and general provision, including—. On 25 June 2020, the Corporate Insolvency and Governance Act 2020 (the Act) received royal assent. The Corporate Insolvency and Governance Act 2020 (the “Act”) was enacted on 25 June, implementing landmark measures to improve the ability of companies to be efficiently restructured. (a)a voluntary arrangement takes effect under section 5 in relation to the company. In this Chapter “the initial period”, in relation to a moratorium, means the period of 20 business days beginning with the business day after the day on which the moratorium comes into force. If the company makes a payment to which subsection (1) applies otherwise than as authorised by that subsection—. the holder of a floating charge (the chargee) is prevented by subsection (2) from giving a notice mentioned there during the moratorium, and. (1)References in Article 13CB to creditor consent are to the consent of pre-moratorium creditors to a revised end date for the moratorium. (a)the disposal is made in the ordinary way of the company's business. The Whole Act you have selected contains over 200 provisions and might take some time to download. the company and its creditors both decide under Article 17 not to approve the voluntary arrangement contained in the proposal; the decisions taken by the company and its creditors under Article 17 differ, and—, the period for making an application under Article 17A(3) expires and either no application has been made within that period or any application made within that period has been withdrawn, or. The monitor in relation to a moratorium may apply to the High Court for directions about the carrying out of the monitor’s functions. (a)an application under this section is made, and. (2)The High Court may make an order providing that a person ceases to act as the monitor in relation to a moratorium. (3)Where a matter is reported to the Department under paragraph (2), the Department may, for the purpose of investigating the matter and such other matters relating to the affairs of the company as appear to the Department to require investigation, exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the Companies Act 1985. (a)presenting a petition for the winding up of the company; (b)making an administration application in respect of the company; (c)appointing an administrator under paragraph 22(2) of Schedule B1. (a)make an order that the moratorium be extended to such date as is specified in the order, or, (5)In deciding whether to make an order under subsection (4)(a) the court must, in particular, consider the following—, (a)the interests of pre-moratorium creditors, as defined by section A12(4) and (5), and. 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) Permission of the court under subsection (1) may be given subject to conditions. The Corporate Insolvency and Governance Act 2020 makes the most significant changes to UK insolvency law in a generation. the disposal is made in the ordinary way of the company’s business, If the company disposes of its property during the moratorium otherwise than as authorised by this Article—, If the company disposes of goods in the possession of the company under a hire-purchase agreement otherwise than as authorised by paragraph. (3)The rules may make provision about the timing of a notice required to be given under subsection (1) or (2). (1)This section applies to an eligible company that—, (a)is not subject to an outstanding winding-up petition, and. (1)At any time after the first 15 business days of the initial period, the directors may apply to the court for an order that the moratorium be extended. For these purposes, excepted petition means a petition under—. (2)The Court may give permission under paragraph (1) only if the Court thinks that it will support the rescue of the company as a going concern. (b)for a person charged with an offence under paragraph (1) in respect of any of the things mentioned in paragraph (2)(c) or (d) to prove that the person had no intent to conceal the state of affairs of the company or to defeat the law. The directors of a company must notify the monitor if, during a moratorium for the company, they recommend that the company passes a resolution for voluntary winding up under Article 70(1)(b). (a)the disposal is made in the ordinary way of the company’s business. (iii)steps taken with the permission of the court, (d)no steps may be taken to repossess goods in the company's possession under any hire-purchase agreement, except with the permission of the court, and, (e)no legal process (including legal proceedings, execution, distress or diligence) may be instituted, carried out or continued against the company or its property except—. (2)Where persons act jointly in respect of only some of the functions of the monitor, subsection (1) applies only in relation to those functions. (5)Where property subject to a floating charge is disposed of under subsection (1), the holder of the floating charge has the same priority in respect of acquired property as they had in respect of the property disposed of. a statement from the proposed monitor that, in the proposed monitor's view, it is likely that a moratorium for the company would result in the rescue of the company as a going concern. is to be held at such time, date and place as the directors think fit, and. These provisions are contained within the Corporate Insolvency and Governance Act 2020 ("CIGA"), which was brought into force on 25 June 2020. (5)Where an application under paragraph (1) relates to a failure by the monitor to bring the moratorium to an end under Article 13ED(1), an order under paragraph (4) may, in particular, bring the moratorium to an end and make such consequential provision as the Court thinks fit. in relation to subsection (1)(b), the provision made by sections 143A to 159 of the Housing and Regeneration Act 2008; in relation to subsection (2)(b), the provision made by sections 39 to 50 of the Housing Act 1996; in relation to subsection (3)(b), the provision made by Part 7 of the Housing (Scotland) Act 2010; ordinary administration means the insolvency procedure provided for by Schedule B1; special administration regime means provision made by an enactment for an insolvency procedure that—, is similar or corresponds to ordinary administration, and. (3)On the filing with the court of the documents mentioned in subsection (1), the moratorium is extended so that it ends at the end of the period—, (a)beginning immediately after the initial period ends, and. In this Chapter the initial period, in relation to a moratorium, means the period of 20 business days beginning with the business day after the day on which the moratorium comes into force. if later, the day on which the chargee is notified of the end of the moratorium, This section does not apply in relation to a floating charge that is—. (8)See also Article 13CH (obligations to notify change in end of moratorium). make further provision about the timing of a notice required to be given under this section; require a notice to be accompanied by other documents. concealing any part of the company's property to the value of £500 or more, or concealing any debt due to or from the company. The Corporate Insolvency and Governance Act: The Moratorium and just how “super” is Super Priority? Restrictions on enforcement and legal proceedings. , the company must apply the following towards discharging the sums payable under the hire-purchase agreement—. only if it is satisfied that a moratorium for the company would achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being subject to a moratorium). A statutory instrument containing regulations under subsection (2) may not be made unless a draft of the statutory instrument containing them has been laid before and approved by a resolution of Senedd Cymru. a landlord or other person to whom rent is payable may not exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company, except with the permission of the High Court, no steps may be taken to enforce any security over the company’s property except—, steps to enforce a collateral security charge (within the meaning of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (, steps to enforce security created or otherwise arising under a financial collateral arrangement (within the meaning of regulation 3 of the Financial Collateral Arrangements (No. (4)Where a matter is reported to the Secretary of State under subsection (2), the Secretary of State may, for the purpose of investigating the matter and such other matters relating to the affairs of the company as appear to the Secretary of State to require investigation, exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the Companies Act 1985. steps to enforce a collateral security charge (within the meaning of the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. the trustees or managers of the scheme are a creditor of the company, The rights are those which are exercisable by the trustees or managers as a creditor of the company under or by virtue of—, Regulations under subsection (1) may provide that the Board may exercise any such rights—, to the exclusion of the trustees or managers of the scheme, or. This section applies where there is an uncrystallised floating charge on the property of a company for which a moratorium is in force. The Scottish Ministers may by regulations make provision under the law of Scotland—, to modify this Part as it applies in relation to a company that is a social landlord registered under Part 2 of the Housing (Scotland) Act 2010 (asp 17), or. enters into a financial collateral arrangement, grants a market charge or a system-charge, or. (c)a statement from the directors as to whether pre-moratorium creditors (as defined by Article 13CC(5) and (6)) have been consulted about the application and if not why not, and. Replacement of monitor or additional monitor: statement and consent to act. (1)This Article applies where there is an uncrystallised floating charge on the property of a company for which a moratorium is in force. (b)when, subject to any alteration under or by virtue of any of the provisions mentioned in Article 13C(3) or (4), the moratorium will come to an end. If a moratorium comes to an end under section A38 (termination by monitor), the monitor must notify the company and the relevant persons of when the moratorium ended. (6)If the directors fail to comply with paragraph (5), any director who did not have a reasonable excuse for the failure commits an offence. the Board of the Pension Protection Fund may exercise any of the following rights. Where a matter is reported to the Secretary of State under subsection (2), the Secretary of State may, for the purpose of investigating the matter and such other matters relating to the affairs of the company as appear to the Secretary of State to require investigation, exercise any of the powers which are exercisable by inspectors appointed under section 431 or 432 of the Companies Act 1985. apart from that paragraph, the moratorium would end at a time before the application has been disposed of. (3)Regulations under subsection (1) may provide that the Board may exercise any such rights—, (a)to the exclusion of the trustees or managers of the scheme, or. (5)For the consequences of a company granting security over its property in contravention of paragraph (1), see also Article 13DE. No versions before this date are available. In this Chapter section A2 introduces Schedule ZA1 (which defines what is meant by an eligible company). Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area. (6)In subsection (5) acquired property means property of the company which directly or indirectly represents the property disposed of. (a)in the case of a company registered in England and Wales, means the Secretary of State, (b)in the case of a company registered in Scotland, means the Lord Advocate, and, (c)in the case of an unregistered company means—. This section does not affect any right that the appropriate regulator has (apart from this section) as a creditor of a regulated company. (7)Where the Court makes an order giving permission under paragraph (1), the directors must, within the period of 14 days beginning with the date of the order, send a copy of it to the registrar. apart from that paragraph, the moratorium would end at a time before the proposal is disposed of. References in section A11 to creditor consent are to the consent of pre-moratorium creditors to a revised end date for the moratorium. The Corporate Insolvency and Governance Act 2020 (the “Act”) has therefore been passed into law. (5)Paragraph (1)(b)(iii) is subject to Article 13DE(1). Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Where a matter is reported to the Department under paragraph. , the person’s answer may be used in evidence against them. (4)On an application under subsection (1) the court may—. any actual or proposed act or omission of the directors during a moratorium causes or would cause such harm. Corporate Insolvency & Governance Act 2020 ('CIGA'): Helping DB Pension Trustees Prepare CIGA has enacted arguably the most significant changes to the UK’s corporate rescue toolkit since 1986. Indicates the geographical area that this provision applies to. a company registered under the Companies Act 2006 in Northern Ireland, or. The Act represents the most significant reforms to the insolvency framework in the United Kingdom since, at least, the widespread introduction of administration under the Enterprise Act in 2003. (7)In paragraph (6) “false statement offence” means an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (S.I. (1)The monitor may require the directors of the company to provide any information required by the monitor for the purpose of carrying out the monitor's functions. The Secretary of State may by regulations amend this section for the purposes of changing the circumstances in which the monitor must bring a moratorium to an end under subsection (1). The application must be accompanied by the relevant documents (for the relevant documents, see section A6). Regulations made by the Scottish Ministers under subsection (3) are subject to the affirmative procedure (see section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)). This Article does not affect any right that the appropriate regulator has (apart from this Article) as a creditor of a regulated company. Subsection (2) is without prejudice to the operation of section 16 of the Interpretation Act 1978 (general savings). does not end at the time mentioned in subsection (1)(b), and. Of the provisions introduced, the moratorium is key for businesses that have been impacted by COVID-19. Regulations may not be made under paragraph (4) unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly. (4)Permission of the court under subsection (1) may be given subject to conditions. , 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. (8)In subsection (7) false statement offence means—, (a)an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath), or. Any of the persons specified below may apply to the court on the ground that an act, omission or decision of the monitor during a moratorium has unfairly harmed the interests of the applicant. the company goes into liquidation (see section 247). (3)Where during the moratorium a company enters into a transaction to which this Article applies, nothing done by or in pursuance of the transaction is to be treated as done in contravention of any of Articles 13DA, 13DC, 13DG, 13DH and 13DJ to 13DN. (7)Where the court makes an order giving permission under subsection (1), the directors must, within the period of 14 days beginning with the date of the order, send a copy of it to the registrar of companies. During a moratorium, the monitor must monitor the company's affairs for the purpose of forming a view as to whether it remains likely that the moratorium will result in the rescue of the company as a going concern. (d)the company goes into liquidation (see Article 6). (1)An officer of a company commits an offence if, during a moratorium for the company or at any time within the period of 12 months ending with the day on which a moratorium for the company comes into force, the officer—, (a)does any of the things mentioned in subsection (2), or. (3)On the filing with the Court of a notice under paragraph (1), the moratorium comes to an end. 19)), immediately before Part 2 (and after the heading before Parts 2 to 7) insert—. (b)the petition has not been withdrawn or determined. (a)the monitor thinks that the moratorium is no longer likely to result in the rescue of the company as a going concern. The persons who may apply to the court under section A39(3), A42(1) or A44(1) include the appropriate regulator. (5)If the directors fail to comply with subsection (4), any director who did not have a reasonable excuse for the failure commits an offence. Schedule 1 inserts into the Insolvency Act 1986 a new Schedule ZA1 (eligible companies). (f)debts or other liabilities arising under a contract or other instrument involving financial services. The Corporate Insolvency and Governance Act 2020 (CIGA 2020) received Royal Assent on 25 June 2020. During a moratorium, the company may, with the permission of the High Court, dispose of goods which are in the possession of the company under a hire-purchase agreement as if all of the rights of the owner under the agreement were vested in the company. (3)Where regulations of the Secretary of State under this Part are subject to the affirmative resolution procedure, they may not be made unless a draft of the statutory instrument containing them has been laid before Parliament and approved by a resolution of each House of Parliament.”. Article 13CG (termination on entry into insolvency procedure etc); Article 13F or 13FB (termination by High Court). (iii)a legal process instituted, carried out or continued with the permission of the court. (5)The court may make an order under subsection (4)(a) only if it is satisfied that a moratorium for the company would achieve a better result for the company's creditors as a whole than would be likely if the company were wound up (without first being subject to a moratorium). When it was enacted or made ): the moratorium ) on the with. Done with a requirement to provide information as soon as practicable not have a payment to which subsection ( )! 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