Corporate Insolvency and Governance Act 2020

(13A) (1) This Part contains provision that enables an eligible company, in certain circumstances, to obtain a moratorium, giving it various protections from creditors set out in this Part. (2) In this Chapter Article 13AA introduces Schedule ZA1 (which defines what is meant by an “eligible” company). (3) Chapter 2 sets out how an eligible company may obtain a moratorium. (4) Chapter 3 sets out for how long a moratorium has effect. (5) Chapter 4 sets out the effects of a moratorium on the company and its creditors. (6) Chapter 5 contains provision about the monitor. (7) Chapter 6 contains provision about challenges. (8) Chapter 7 contains provision about certain offences. (9) Chapter 8 contains miscellaneous and general provision, including— (a) special provision for certain kinds of company; (b) definitions for the purposes of this Part; (c) provision about regulations under this Part. (13AA) Schedule ZA1 contains provision for determining whether a company is an eligible company for the purposes of this Part. (13B) (1) This Article applies to an eligible company that— (a) is not subject to an outstanding winding-up petition, and (b) is not an overseas company. (2) The directors of the company may obtain a moratorium for the company by filing the relevant documents with the High Court (for the relevant documents, see Article 13BC). (3) For the purposes of this Chapter a company is “subject to an outstanding winding-up petition” if— (a) a petition for the winding up of the company has been presented, and (b) the petition has not been withdrawn or determined. (13BA) (1) This Article applies to an eligible company that is subject to an outstanding winding-up petition. (2) The directors of the company may apply to the High Court for a moratorium for the company. (3) The application must be accompanied by the relevant documents (for the relevant documents, see Article 13BC). (4) On hearing the application the Court may— (a) make an order that the company should be subject to a moratorium, or (b) make any other order which the Court thinks appropriate. (5) The Court may make an order under paragraph (4)(a) only if it is satisfied that a moratorium for the company would achieve a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being subject to a moratorium). (13BB) (1) This Article applies to an eligible company that— (a) is not subject to an outstanding winding-up petition, and (b) is an overseas company. (2) The directors of the company may apply to the High Court for a moratorium for the company. (3) The application must be accompanied by the relevant documents (for the relevant documents, see Article 13BC). (4) On hearing the application the Court may— (a) make an order that the company should be subject to a moratorium, or (b) make any other order which the Court thinks appropriate. (13BC) (1) For the purposes of this Chapter, “the relevant documents” are— (a) a notice that the directors wish to obtain a moratorium, (b) a statement from a qualified person (“the proposed monitor”) that the person— (i) is a qualified person, and (ii) consents to act as the monitor in relation to the proposed moratorium, (c) a statement from the proposed monitor that the company is an eligible company, (d) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its debts, and (e) a statement from the proposed monitor that, in the proposed monitor’s view, it is likely that a moratorium for the company would result in the rescue of the company as a going concern. (2) Where it is proposed that more than one person should act as the monitor in relation to the proposed moratorium— (a) each of them must make a statement under paragraph (1)(b), (c) and (e), and (b) the statement under paragraph (1)(b) must specify— (i) which functions (if any) are to be exercised by the persons acting jointly, and (ii) which functions (if any) are to be exercised by any or all of the persons. (3) The rules may make provision about the date on which a statement comprised in the relevant documents must be made. (4) Regulations may amend this Article for the purposes of adding to the list of documents in paragraph (1). (5) Regulations may not be made under paragraph (4) unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly. (13BD) (1) A moratorium for a company comes into force at the time at which— (a) in the case of a company to which Article 13B applies, the relevant documents are filed with the High Court under paragraph (2) of that Article; (b) in the case of a company to which Article 13BA applies, an order is made under Article 13BA(4)(a); (c) in the case of a company to which Article 13BB applies, an order is made under Article 13BB(4)(a). (2) On the coming into force of a moratorium, the person or persons who made the statement mentioned in Article 13BC(1)(b) become the monitor in relation to the moratorium. (13BE) (1) As soon as reasonably practicable after a moratorium for a company comes into force, the directors must notify the monitor of that fact. (2) As soon as reasonably practicable after receiving a notice under paragraph (1), the monitor must notify the following that a moratorium for the company has come into force— (a) the registrar, (b) every creditor of the company of whose claim the monitor is aware, (c) in a case where the company is or has been an employer in respect of an occupational pension scheme that is not a money purchase scheme, the Pensions Regulator, and (d) in a case where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by Article 110 of the Pensions (Northern Ireland) Order 2005, the Board of the Pension Protection Fund. (3) A notice under paragraph (2) must specify— (a) when the moratorium came into force, and (b) when, subject to any alteration under or by virtue of any of the provisions mentioned in Article 13C(3) or (4), the moratorium will come to an end. (4) If the directors fail to comply with paragraph (1), any director who did not have a reasonable excuse for the failure commits an offence. (5) If the monitor without reasonable excuse fails to comply with paragraph (2), the monitor commits an offence. (13C) (1) A moratorium ends at the end of the initial period unless it is extended, or comes to an end sooner, under or by virtue of a provision mentioned in paragraph (3) or (4). (2) In this Chapter “the initial period”, in relation to a moratorium, means the period of 20 business days beginning with the business day after the day on which the moratorium comes into force. (3) For provision under or by virtue of which a moratorium is or may be extended, see— - Article 13CA (extension by directors without creditor consent); - Article 13CB (extension by directors with creditor consent); - Article 13CD (extension by High Court on application of directors); - Article 13CE (extension while proposal for CVA pending); - Article 13CF (extension by High Court in course of other proceedings). (4) For provision under or by virtue of which the moratorium is or may be terminated, see— - Article 13CG (termination on entry into insolvency procedure etc); - Article 13ED (termination by monitor); - Article 13F or 13FB (termination by High Court). (5) A moratorium may not be extended under a provision mentioned in paragraph (3) once it has come to an end. (6) Where the application of two or more of the provisions mentioned in paragraphs (3) and (4) would produce a different length of moratorium, the provision that applies last is to prevail (irrespective of whether that results in a shorter or longer moratorium). (13CA) (1) During the initial period, but after the first 15 business days of that period, the directors may extend the moratorium by filing with the High Court— (a) a notice that the directors wish to extend the moratorium, (b) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged— (i) moratorium debts, and (ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see Article 13D), (c) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts, and (d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern. (2) The rules may make provision about the date on which a statement mentioned in paragraph (1) must be made. (3) On the filing with the Court of the documents mentioned in paragraph (1), the moratorium is extended so that it ends at the end of the period— (a) beginning immediately after the initial period ends, and (b) ending with the 20th business day after the initial period ends. (13CB) (1) At any time after the first 15 business days of the initial period the directors may, if they have obtained creditor consent, extend the moratorium by filing with the High Court— (a) a notice that the directors wish to extend the moratorium, (b) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged— (i) moratorium debts, and (ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see Article 13D), (c) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts, (d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern, and (e) a statement from the directors that creditor consent has been obtained, and of the revised end date for which that consent was obtained. (2) The rules may make provision about the date on which a statement mentioned in paragraph (1) must be made. (3) On the filing with the Court of the documents mentioned in paragraph (1), the moratorium is extended so that it ends with the revised end date mentioned in the statement under paragraph (1)(e). (4) A moratorium may be extended under this Article more than once. (13CC) (1) References in Article 13CB to creditor consent are to the consent of pre-moratorium creditors to a revised end date for the moratorium. (2) The decision as to consent is to be made at a meeting of pre-moratorium creditors. (3) A meeting under paragraph (2)— (a) is to be held at such time, date and place as the directors think fit, and (b) is to be conducted in accordance with the rules. (4) The revised end date must be a date before the end of the period of one year beginning with the first day of the initial period. (5) In this Article “pre-moratorium creditor” means a creditor in respect of a pre-moratorium debt— (a) for which the company has a payment holiday during the moratorium (see Article 13D), and (b) which has not been paid or otherwise discharged. (6) In determining for the purposes of paragraph (5) what counts as a pre-moratorium debt for which the company has a payment holiday during the moratorium, Articles 13D(3) and 13HD(1)(b) apply as if the references to the moratorium were to the moratorium as proposed to be extended. (7) Regulations may amend this Article for the purposes of changing the definition of “pre-moratorium creditor”. (8) Regulations may not be made under paragraph (7) unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly. (13CD) (1) At any time after the first 15 business days of the initial period, the directors may apply to the High Court for an order that the moratorium be extended. (2) The application must be accompanied by— (a) a statement from the directors that all of the following that have fallen due have been paid or otherwise discharged— (i) moratorium debts, and (ii) pre-moratorium debts for which the company does not have a payment holiday during the moratorium (see Article 13D), (b) a statement from the directors that, in their view, the company is, or is likely to become, unable to pay its pre-moratorium debts, (c) a statement from the directors as to whether pre-moratorium creditors (as defined by Article 13CC(5) and (6)) have been consulted about the application and if not why not, and (d) a statement from the monitor that, in the monitor’s view, it is likely that the moratorium will result in the rescue of the company as a going concern. (3) The rules may make provision about the date on which a statement mentioned in paragraph (2) must be made. (4) On hearing the application the Court may— (a) make an order that the moratorium be extended to such date as is specified in the order, or (b) make any other order which the Court thinks appropriate. (5) In deciding whether to make an order under paragraph (4)(a) the Court must, in particular, consider the following— (a) the interests of pre-moratorium creditors, as defined by Article 13CC(5) and (6), and (b) the likelihood that the extension of the moratorium will result in the rescue of the company as a going concern. (6) Paragraph (7) applies where— (a) an application under this Article is made, and (b) apart from that paragraph, the moratorium would end at a time before the application has been disposed of. (7) The moratorium— (a) does not end at the time mentioned in paragraph (6)(b), and (b) instead, ends— (i) in a case in which the Court makes an order under paragraph (4)(a), in accordance with the order; (ii) otherwise, when the application is withdrawn or disposed of. (8) A moratorium may be extended under this Article more than once. (13CE) (1) Paragraph (2) applies where— (a) at any time, the directors make a proposal under Part 2 (company voluntary arrangements), and (b) apart from that paragraph, the moratorium would end at a time before the proposal is disposed of. (2) The moratorium— (a) does not end at the time mentioned in paragraph (1)(b), and (b) instead, ends when the proposal is disposed of. (3) For the purposes of this Article a proposal under Part 2 is “disposed of” when any of the following takes place— (a) the company and its creditors both decide under Article 17 not to approve the voluntary arrangement contained in the proposal; (b) the decisions taken by the company and its creditors under Article 17 differ, and— (i) the period for making an application under Article 17A(3) expires and either no application has been made within that period or any application made within that period has been withdrawn, or (ii) an application is made under Article 17A(3) and that application is disposed of, or it is withdrawn after the expiry of the period for making an application under Article 17A(3); (c) the voluntary arrangement contained in the proposal takes effect under Article 18; (d) the proposal is withdrawn. (13CF) (1) Paragraph (2) applies where— (a) an application is made under section 896 or 901C(1) of the Companies Act 2006 (arrangements and reconstructions: court order for holding of meeting) in respect of a company, and (b) during proceedings before the High Court in connection with the application, a moratorium for the company is in force. (2) The High Court may make an order that the moratorium be extended to such date as is specified in the order. (13CG) (1) A moratorium comes to an end at any time at which the company— (a) enters into a compromise or arrangement (see paragraph (2)), or (b) enters into a relevant insolvency procedure (see paragraph (3)). (2) For the purposes of this Article a company enters into a compromise or arrangement if an order under section 899 or 901F of the Companies Act 2006 (court sanction for compromise or arrangement) comes into effect in relation to the company. (3) For the purposes of this Article a company enters into a relevant insolvency procedure if— (a) a voluntary arrangement takes effect under Article 18 in relation to the company, (b) the company enters administration (within the meaning of Schedule B1 (see paragraph 2(2)(b) of that Schedule)), (c) paragraph 45 of Schedule B1 (administration: interim moratorium) begins to apply in relation to the company, or (d) the company goes into liquidation (see Article 6). (13CH) (1) The table imposes obligations on the directors of a company to notify the monitor where a moratorium for the company is extended or comes to an end.