On 28 Mar 2020 the Business Secretary, Alok Sharma, announced changes to the insolvency rules in response to the coronavirus outbreak. The intention is to make changes to enable UK companies undergoing a rescue or restructure to continue trading, helping them avoid insolvency.
This will include enabling them to buy supplies while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability.
Alok Sharma MP said: “Today’s measures will also reduce the burden on business, giving bosses much-needed breathing space to keep their workers employed and their companies going.”
This is a pragmatic move and a useful addition to the Government’s strategy to protect employment and prosperity. The proposed moratorium will definitely help some businesses survive, but we would encourage any directors with concerns about their company to seek professional advice at the earliest opportunity. We have established links with insolvency practitioners to assist our clients through this difficult period.