What does the UK Corporate Insolvency and Governance Act 2020 mean for ABL?
Last updated 15 April 2021
The Corporate Insolvency and Governance Act 2020 makes the most significant changes to UK insolvency law in a generation.
The Act introduces three permanent measures: a new free standing moratorium, a new restructuring plan process (largely modelled on schemes of arrangement but with the addition of a cross-class cram-down), and restrictions on termination of contracts for the supply of goods and services.
The moratorium and the restructuring plan are of particular significance to secured lenders, and this update addresses some of the most frequently asked questions by the asset based lending community.
The Act also includes temporary measures in response to the COVID-19 pandemic such as restrictions on using winding-up processes, temporary changes to wrongful trading rules, and relaxation of meetings and filing requirements to give companies greater flexibility.