On 25 June 2020, the new Corporate Insolvency and Governance Act (the "Act") received Royal Assent. We anticipate that the changes introduced by the Act will have a significant impact on the future direction of the UK restructuring market.
The purpose of the Act is to promote a stronger rescue culture in the UK, providing companies in financial distress with a better chance of being restructured on a going concern basis (in a similar way to a U.S. Chapter 11). The changes introduced by the Act were initially put forward by the Government in 2016, and were subject to consultation in 2018. A new restructuring regime for the UK had therefore been anticipated. However, in response to COVID 19, the timing of the implementation of the Act was accelerated and certain provisions have been revised (as compared to the Government's proposals announced in 2018), in order to ensure that the Act is more responsive to current economic conditions.
In this White Paper, we highlight the main changes introduced by the Act and discuss the key implications for stakeholders.
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