The Corporate Insolvency & Governance Bill – Further Extension of Temporary Measures, Liability for Wrongful Trading Remains Suspended

April 23rd 2021

Whilst the lockdown measures are gradually being lifted, the various temporary insolvency measures originally set out in the Corporate Insolvency and Governance Act 2020 (CIGA), have been extended once more.  In addition, liability for wrongful trading remains, for the time being, suspended. 

Extension of Temporary Measures

Extended until 30 June 2021:

  • The prohibition on presenting winding-up petitions based on statutory demands.
  • The restriction on presenting winding-up petitions based on the ground that a company is unable to pay its debts as they fall due, unless the creditor can establish that the inability to pay is not linked to the Covid-19 pandemic. 
  • The temporary exclusion of small suppliers from the restrictions on terminating supply contracts on grounds of insolvency.
  • The relaxation of director’s personal liability for wrongful trading. For more in provisions set out in section 214 of the Insolvency Act 1986.

Extended until 30 September 2021:

  • The relaxed entry requirements for the new statutory moratorium under Part A1 of the Insolvency Act 1986 introduced by CIGA. These temporary relaxations include a waiver of the requirement that a company seeking a Part A1 moratorium has to make a court application if they are subject to a winding-up petition; and a waiver of the requirement that a company seeking a Part A1 moratorium has not been subject to an insolvency procedure or a Part A1 moratorium in the preceding 12 months.

For a more detailed explanation of the restrictions on presenting winding-up petitions and the relaxation of the wrongful trading provisions, please see our previous article posted in January.

Next Steps

Petra van Dijk is an Associate Solicitor in Spratt Endicott’s Dispute Resolution practice, specialising in contentious and non-contentious insolvency. Contact Petra on

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation. This article is accurate at time of publication on 23rd of April 2021.