On 29th September 2020, the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020/1031 (the ‘Extension of the Relevant Period Regulations’) will come into force.
The only substantial paragraph is paragraph 2, entitled 'Amendment of the Corporate Insolvency and Governance Act 2020’, and paragraph 2(1) and (3) read:
‘(1) The Corporate Insolvency and Governance Act 2020 is amended as follows.
(3) In paragraphs 1(3)(b) and 21(1)(b) of Schedule 10 (winding-up petitions: Great Britain) for "30 September 2020" substitute "31 December 2020”.'
The effect of this will be as follows:
Firstly, Part 1 of Schedule 10, entitled ‘Prohibition of Petitions on Basis of Statutory Demands’, will read:
‘1 (1) No petition for the winding up of a registered company may be presented under section 124 of the 1986 Act on or after 27 April 2020 on the ground specified in paragraph (a) of section 123(1) of that Act, where the demand referred to in that paragraph was served during the relevant period.
2) No petition for the winding up of an unregistered company may be presented under section 124 of the 1986 Act on the ground set out in section 222 of that Act, where the demand referred to in section 222 was served during the relevant period.
(3) In this Part of this Schedule, the “relevant period” is the period which—
(a) begins with 1 March 2020, and
(b) ends with 31 December 2020.
(4) This paragraph is to be regarded as having come into force on 27 April 2020.’
[Bold added for emphasis]
Secondly, Part 2 of Schedule 10, entitled ‘Restriction on Winding-up Petitions and Orders’, containing the main Coronavirus restrictions on winding up petitions/orders, will read:
21 (1) In this Part of this Schedule, “relevant period” means the period which—
(a) begins with 27 April 2020, and
(b) ends with 31 December 2020’
[Bold added for emphasis]
The overall effect, of course, is that the Schedule 10 Restrictions will continue to apply for an extra 3 months. Good for debtor but not so good for creditors.
The Extension of the Relevant Period Regulations were made under powers conferred on the Secretary of State by section 41(1)(b) of, and paragraph 2(2)(b) of Schedule 14 to, the Corporate Insolvency and Governance Act 2020.
The Extension of the Relevant Period Regulations also amend other parts of the Corporate Insolvency and Governance Act 2020, as detailed in the Note to the Extension of the Relevant Period Regulations. That Note, dealing with all the amendments, reads:
‘These Regulations prolong the period within which certain temporary provisions in the Corporate Insolvency and Governance Act 2020 (c.12) ("CIGA"), (and referred to for the purposes of CIGA as the "relevant period"), are to have effect.
The temporary provisions consist of modifications to aspects of corporate insolvency law and company law so as to mitigate effects of coronavirus. In the case of the temporary modifications to which these Regulations apply CIGA provides that the relevant period ends on 30th September 2020.
Regulation 2 amends specified provisions in CIGA to change the date upon which the relevant period ends for certain of the temporary modifications. Temporary modifications to the use of certain types of contractual terms as well as modifications to the moratorium procedure in Part A1 of the Insolvency Act 1986 (c.45) (as inserted by section 1 of CIGA) are extended to 30th March 2021, temporary modifications concerning company winding-up petitions are extended to 31st December 2020, and, finally, a temporary modification concerning meetings of companies and other bodies is extended to 30th December 2020.’
Schedule 10 to The Corporate Insolvency and Governance Act 2020, in its current (pre 29th September 2020) form ca be viewed here.
SIMON HILL © 2020
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.