Executive Summary -

In a press statement on 28 March 2020, the UK government announced proposed changes to insolvency laws in response to the Covid-19 coronavirus.

• Wrongful trading: there will be a temporary suspension of wrongful trading provisions for company directors, applied retrospectively from 1 March 2020.

• Changes to corporate insolvency law: In 2018, the UK government announced plans to introduce new restructuring procedures including (a) a short moratorium that will give companies a breathing space from creditor action to explore options for rescue; (b) a new restructuring plan based on the scheme of arrangement with the ability to cram down a dissenting class of creditors; and (c) provisions preventing creditors from relying on contractual termination clauses as a result of insolvency proceedings. In the recent press statement, the UK government announced that it would be advancing these proposals.