The Corporate Insolvency and Governance Act 2020 (CIGA) introduced various temporary measures to help protect companies affected by the lockdown restrictions during the pandemic. Two significant restrictions which remained in force until 31 March 2022 were:
1. no company could be wound up if the undisputed debt was under £10,000 (previously £750);
2. creditors were required to give debtor companies 21 days in which to propose a repayment plan before a winding up petition could be presented.
Those restrictions will no longer apply from 1 April 2022 and the insolvency regime will return to its pre-coronavirus (COVID-19) procedure, so that creditors will be able to pursue debtor companies if the undisputed debt exceeds £750 and there will be no requirement to give a debtor company a 21 day notice period.
Will this be a welcomed change for businesses?
The re-introduction of the old insolvency regimes may not be welcomed by those firms struggling to cope with the after-effects of coronavirus but will be hailed by creditors.