Following consultations on insolvency and corporate governance
in 2017 and 2018, the Government recently published its response
setting out some notable proposed changes to the existing
insolvency and corporate governance legislation. Following the high
profile failures of Carillion and BHS, the Government's
response is largely aimed at encouraging the recovery of viable
companies, improving transparency and promoting responsible
directorship. This article will primarily look at the proposed
changes focused on facilitating a rescue culture.
The response proposes the following changes to the insolvency
legislation:
- The introduction of a
pre-administration moratorium, throughout which the directors will
remain in control of the company and a licensed insolvency
practitioner (an "IP") (referred to as a
monitor) will support the integrity of the moratorium process and
ensure creditors are protected.
