Covid - 19: Reform to insolvency legislation

The Insolvency Service has been consulting with professionals within the industry in consideration of emergency legislation to reform current insolvency law. This has been reported to include: 

• a moratorium on winding up and bankruptcy petitions; 
• disallowing claims being brought for wrongful trading; and
• an extension of the moratorium period given when filing a notice of intention to appoint administrators.

The new legislation is being proposed to allowing directors more protection during this period and to prevent viable businesses from collapse resulting in unnecessary damage to the economy.