Some temporary relief measures introduced under the Corporate Insolvency and Governance Act 2020 (CIGA) are extending, the Government announced on 16 June 2021.
CIGA was introduced in June 2020 to support companies facing the threat of insolvency during the height of the Covid-19 pandemic. The most affected businesses were small and medium-sized enterprises (SMEs) and those in the entertainment, hospitality and tourism sectors.
There are some key changes that companies need to be aware of, which we have included below:
Currently, creditors can only present this type of petition if they successfully pass the “Coronavirus test”. This test requires them to prove to a court that they have reasonable grounds for believing that Covid-19 has had no financial impact on the company in debt or that the debt issues would have risen regardless of the pandemic’s impact on the company.
If you are concerned about the possibility of your company facing insolvency, then please contact us at your earliest convenience.
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