A Message from New Square Chambers’ Insolvency Team

30th March 2020

The last few years have seen a number of sectors struggle financially, and eventually resort to a formal insolvency process. The current Covid-19 pandemic will only increase financial pressure on the retail, hospitality and construction industries, to name but a few. The Coronavirus Act 2020, and measures introduced by the Government such as the Coronavirus Job Retention Scheme, deferral of tax payments and Coronavirus Business Interruption Loan Scheme may offer temporary relief, but they give rise to a number of questions, such as:

  • Are directors obliged to apply for grants or loans to assist in the continued trading of their companies?
  • Might directors be liable for wrongful trading if they attempt to prolong the life of a business, in line with Government policy?
  • Is administration remotely workable in the current lockdown?
  • Are payments made to other creditors in preference to HMRC, in circumstances where liability is being deferred, liable to be recouped should a formal insolvency process be entered into later down the line?
  • Can trustees in bankruptcy obtain orders for possession and sale?
  • Should properties be disclaimed where tenants are not paying rent, but cannot be evicted?

The current, rapid changes to the administration of the Court system are also creating uncertainty.

The insolvency specialists at New Square Chambers are ready, willing and able to answer all of the above questions and more. We know that your clients, whether they be insolvency practitioners, individuals, directors or companies, will need robust advice and guidance in these strange and uncertain times, and we are here to help.

Please get in touch with our clerking team if we can assist in any way.

Kind Regards,

New Square Chambers.

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