CIGA – extension of time

The amendments introduced by the Regulations are as follows:

• The relevant period permitting companies and other qualifying bodies to hold their Annual General Meetings virtually is extended to 30 December 2020
• The relevant period for the limitations and restrictions on the use of statutory demands and the presentation of winding up petitions is extended to 31 December 2020.  This means that statutory demands served between 30 March and 31 December 2020 are ineffective.  It also means that a creditor can only present a petition to wind up a company where they have reasonable grounds to believe that COVID-19 has not had a financial impact on the company, or that the relevant grounds would have applied even if COVID-19 had not had an effect on the Company
• The temporary exclusion allowing small suppliers of goods and services to terminate a contract on the basis that the other party has entered an insolvency process is extended to 30 March 2021.  For the avoidance of doubt, the prohibition of clauses which terminate on the basis of insolvency remains in place, subject only to the small suppliers exclusion
• The relaxation of the conditions for obtaining a moratorium under the procedure introduced by CIGA is extended to 30 March 2021.  This means that a company can enter a moratorium even in circumstances where it has been subject to an insolvency procedure within the previous 12 months

The suspension of liability for wrongful trading has not been extended under the Regulations.  The suspension will end on 30 September 2020.

Connected articles:

• CIGA – much ado about nothing?
• Collecting debts in a pandemic 
• Suspension of wrongful trading