News: The Bankruptcy of Companies in the UK Will Be Held Under New Rules

The British authorities have changed the rules of bankruptcy proceedings. The law has received Royal sanction and has already entered into legal force. This is the largest change in the insolvency law in the last 20 years. The amendments introduce new restructuring rules and opportunities for maintaining the company. Organizations that are on the verge of bankruptcy will be able to take advantage of a number of concessions.

The UK introduces the status of the monitor. If a company uses the services of monitors, protection from creditors is applied to it for a period of 20 working days. In this case, the legal entity may request assistance from the competent authorities in order to carry out a restructuring. The monitor can apply for an extension of the special mode of operation, or vice versa, lift a moratorium if it is already impossible to save the organization. The monitor status can be only obtained by a licensed manager.

The amendments also expanded the list of conditions under which companies can suspend the clause on the termination of the contract. In particular, legal entities can take advantage of this option if they introduce a new restructuring plan.

In addition, an option is included in the amendment package that makes the compulsory bankruptcy of companies impossible. The restriction is valid until September 30. Legal entities will be able to use it if they prove that insolvency is caused by quarantine measures due to coronavirus.

The UK government has also adopted a number of other amendments. In particular, companies may file reports or register collateral later.

Law&Trust offers services for corporate clients working in the UK. We will tell you about all legislative innovations and take all necessary measures to prevent the bankruptcy of your business.