In May, we reported that the UK Government's much anticipated reforms to UK insolvency law were introduced in Parliament when the Corporate Insolvency and Governance Bill 2020 (the "Bill") started its passage in the House of Commons on 20 May 2020.
As expected, the Bill has been fast-tracked through Parliament. The Bill received Royal Assent and the Corporate Insolvency and Governance Act 2020 (the "Act") became an Act of Parliament on 25 June 2020, just five weeks after the legislative process began. The majority of its provisions commence today, on 26 June 2020, albeit most of the temporary business protection measures it enacts have retrospective effect from 1 March 2020.
The Act needs to be seen in the context of being processed, in large part, as emergency legislation. To this end, any amendments made to the Bill are limited to those seen as critical and in respect of which there had been significant objections. These include, most notably, the Pensions Regulator and the Pensions Protection Fund (as appropriate) being given rights to receive information and/or challenge actions in respect of a moratorium and restructuring plan, financial debt accelerated during the moratorium not being granted super priority status after the moratorium comes to an end and extending the time period for which the COVID-19 specific special measures are in place until 30 September 2020.
In this alert, we recap the changes and the divergences between the legislation as it was introduced in the Bill last month and the form of the final Act.
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