The impact of the Corporate Insolvency and Governance Act 2020 on credit insurers and suppliers

The Corporate Insolvency and Governance Act 2020 (CIGA) came into force in June 2020 as part of the government’s response to the COVID-19 crisis aimed at promoting the rescue of companies in financial difficulties. It introduced three new permanent measures: a “Moratorium” procedure; a procedure for the compromise or arrangement with creditors of a company in financial difficulties or “Restructuring Plan” and rules prohibiting the termination of contracts for the supply of goods and services by reason of insolvency (the so called “ipso facto” clauses) as well as a number of temporary measures intended to reduce the number of insolvency procedures during the pandemic. The Act represents the biggest change to insolvency legislation in 20 years and has particular implications for supply chains and credit insurance (for instance will credit insurers continue cover if a supplier is forced by the new measures to continue to supply?) ...