The height of a global pandemic may not seem like a particularly propitious time to roll out a transformative piece of corporate legislation, but in June 2020 the UK’s Corporate Insolvency and Governance Act (CIGA) came into force.
The Insolvency Service described it as the most significant change to the UK’s corporate insolvency regime in more than 20 years.
And one of its key provisions was the introduction of the new role of a monitor to oversee a corporate moratorium: an extendable, 20-working-day period giving businesses protection from creditor action – unless they have the permission of the court – while the business seeks professional restructuring advice.
CIGA gives companies time to present a restructuring plan to stakeholders
The benign impact of state support since the onset of Covid-19 is clear to see. The monthly insolvency statistics for March, covering England and Wales, show that the number of registered company insolvencies (992) was 20% lower than the figure for the same period in 2020 and down 37% from March 2019.
CIGA has also introduced a new restructuring plan that can bind creditors to it.
