Those interim measures were initially scheduled to come to an end in late September 2020. However, the Government provided further relief by extending the interim measures until 31 December 2020.
With the year now 2021, here's an update on the status of those interim protections.
For those who aren't aware, company directors are under a duty to prevent insolvent trading by their company. Prior to COVID-19, a director would be personally liable for insolvent trading:
However, directors who engaged in dishonest or fraudulent conduct during that interim period that would attract criminal penalties, were not relieved by the interim safe harbour defence.
This change, coupled with the reversion of pre-COVID-19 bankruptcy and insolvency laws, means that we will most likely see a sharp increase of creditor petitions and winding up proceedings commencing on and from the next few weeks.
If you or your business will be affected by these insolvency changes and you are looking for advice, please get in touch with our Litigation and Dispute Resolution team today. We have extensive experience in advising large to small companies as well as directors, liquidators, creditors and other stakeholders of companies in an insolvency context and would be more than happy to assist.