Winding-up petitions post pandemic
CAN CREDITORS PUT THE GLOVES BACK ON? YES BUT NOT FULLY
Creditors and solicitors alike will have been keeping a keen eye on whether the current restrictions preventing the issue of winding petitions would be extended beyond 30 September 2021. We now have the likely answer which, in essence, amounts to a partial reprieve for debtors and creditors alike (well some of them at least…….)
In a press release from the Insolvency Service yesterday (9 September 2021), the Government announced that certain temporary insolvency restrictions brought in to support businesses during the pandemic will be phased out from 1 October 2021. Commercial landlords, however, will still be prevented from presenting winding up petitions against limited companies to repay commercial rent arrears built up during the pandemic as existing restrictions will remain in force.
At the same time, new targeted measures will be introduced on a temporary basis to support small businesses and commercial tenants. Whilst the devil will be in the detail it appears that these measures are likely to include temporarily raising the current debt threshold for a winding up petition to £10,000 or more (the current level is £750) and a requirement for creditors to seek proposals for payment from a debtor business, giving them 21 days for a response, before they can proceed with winding up action. The indication is that these measures will be in force until 31 March 2022.
To read the press release in full, click here.
Further detail will follow once clarity is forthcoming from HMG
We are here to offer advice and assistance through these turbulent times. If you wish to discuss any aspect of insolvency (personal or business), please contact John Bradshaw or Sarah Mower, dedicated insolvency specialists in our Insolvency & Business Recovery Team.
John Bradshaw is a partner and specialist in Insolvency & Business Recovery at Barker Gotelee Solicitors.