In November the Insolvency Service published its final report on the operation of the permanent measures within the Corporate Insolvency and Governance Act 2020 (CIGA), noting that the Restructuring Plan procedure under Part 26A Companies Act 2006 continues to be seen as satisfying its policy objectives.
Likewise, s.233B Insolvency Act 1986 (IA 1986), which generally prohibits the enforcement of ‘termination clauses’ in contracts for the supply of goods and services that are triggered upon an insolvency event, have continued to be seen as a valuable corporate rescue tool preventing insolvent companies from being held hostage by suppliers by withdrawing supply services.
That said, the industry has expressed concern around the standalone Moratorium process under Part A1 IA 1986, and also considers that there is some ambiguity about whether s.233B effectively prevents suppliers asking for additional ‘ransom’ payments and around the application of its ‘hardship provision.
A copy of the Final Evaluation Report can be accessed here.