New Insolvency Procedure  

The Corporate Insolvency and Governance Act 2020 (the “Act”) was enacted in June, implementing measures to improve the ability of companies to be efficiently restructured. The Act also included temporary measures to alleviate pressure arising from the coronavirus pandemic. These temporary measures were originally due to expire on 30 September 2020. 

The Act prohibits the presentation of a winding up petition based on an unsatisfactory statutory demand served between 1 March and 31 December 2020.  

Whilst this legislation is in force, a landlord presenting a winding up petition in the relevant period must be able to demonstrate: 

• Coronavirus has not had a financial effect on the tenant company; or 

• The facts relied on would have arisen even if Coronavirus had not had a financial effect on the tenant company. 

What Can Landlords Do?  

The Government’s continued intervention may find landlords with few options at their disposal to recover payment of rents by their tenants using commercial rent arrears recovery (CRAR). Landlords may be obliged to consider alternative methods of recovery of rent which may include: 

• Pursue a guarantor or former tenant  
• Rent deposits 
• Recovery from existing tenants   
• Court proceedings to recover a debt  
• Payment agreements  

You should note this legislation only applies to corporate debtors it does not apply to tenants who are individuals.  

If your business is facing issues where the 2020 Act is at play and require assistance with how these provisions may affect your business please contact our offices on 0113 266 0735.