By Patrick Finn, Senior Associate in Irwin Mitchell's Restructuring & Insolvency team
The Government has extended the provisions referred to in Schedule 10 of the Corporate Insolvency and Governance Act 2020 by prolonging the moratorium on winding up petitions and the ban on corporate statutory demands to 30 September 2021.
This is not surprising given that it has extended the Furlough Scheme to the end of September and gives further breathing space to debtor companies who have been affected by the pandemic.
There are limited options available to creditors to present petitions based on the company’s inability to pay (provided the debt was due for payment on or before 1 March 2020 or if the creditor can prove that the pandemic has not had a financial effect on the debtor company).
This is bad news for creditors who wish to pursue their contractual debts, HMRC for tax debts and other creditors who have abortive executions who would want to enforce their judgments by way of proceeding with a winding up petition.