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Articles Insolvency & Restructuring

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 – continuing a false sense of security for directors and companies alike?

In this article, Catherine Addy QC, Rebecca Page, Rosanna Foskett and Rowena Page examine the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 (“CIGA Extension Regulations 2021”) which come into force on 26 March 2021, and further extend the suspension of wrongful trading liability - almost a year since the Government announced, on 28 March 2020, the range of measures aimed at protecting companies affected by COVID-19 and their directors, as they tried to steer businesses through the choppy waters which were then anticipated to last only a few months.

Beyond wrongful trading: remaining risks and responsibilities

Although the initial three-month suspension of wrongful trading provisions from 1 March 2020 was welcomed as introducing breathing space for boards of directors facing unprecedented uncertainty arising out of the COVID-19 pandemic, the majority of the insolvency legislation remains in force and unchanged.

While the government referred to the provisions relating to fraudulent trading and to disqualification orders as providing continuing checks and balances, neither is very likely to be at the forefront of the minds of directors or those advising them. By contrast, the need to consider creditors under s 172 of the 2006 Act gives rise to a duty of much broader and more uncertain parameters and represents a real and remaining risk of personal liability, particularly given the current financial climate.

Gabriella McNicholas discusses the uncertainties and remaining risks facing company directors in the June edition of Butterworths Journal of International Banking and Financial Law.

Source: Butterworths Journal of International Banking and Financial Law

Re Akkurate Ltd (in Liquidation) [2020]

On 4 June 2020 the Chancellor handed down his decision in Re Akkurate Ltd (in Liquidation) [2020] EWHC 1433 (Ch), the latest in a line of first-instance cases on whether s236 Insolvency Act 1986 has extraterritorial effect.

Rowena Page summarises the law as it was before Akkurate, explores the decision itself, and considers where may be next for questions of extraterritoriality and s236 IA.

The Temporary Insolvency Practice Direction - Preparing for the Side-Effects of Covid-19

This new practice direction came into force on 6 April, and provides important changes to the procedure in insolvency proceedings.

Duncan McCombe’s article summarises the Temporary IPD’s content and puts that content into context. At the same time, Duncan seeks to provide an explanation where the drafting of the Temporary IPD may seem a little opaque.

Source: Corporate Rescue and Insolvency

Seize the day - jurisdictional challenge

What effect will the recent Court of Appeal decision of Erste Group Bank AG v JSC 'VMZ Red October' have on jurisdictional issues in English law? Richard Morgan QC, one of the barristers who argued the case, says that although these types of issues may be litigated more frequently, the English courts are doing a good job acting as a gatekeeper in relation to the extent of their jurisdiction.

Source: Lexis®PSL Restructuring & Insolvency

Set-off and Crown departments

This short article by Michael Gibbon QC examines some key principles in relation to set-off involving Crown departments in the context of liquidation. The subject often arises for consideration in a liquidation, normally with regard to tax debits and credits, but from time to time non-tax claims will be involved too.

Source: Corporate Rescue and Insolvency - New Law Journal - Lexis Nexis

Contentious cases 2016

A look at the legal landmarks that have affected the profession recently and how they’ll affect insolvency in 2016.

Source: R3 Recovery Spring 2016