Corporate Insolvency and Governance Bill (HC Bill 128)

52 (1) Section 118 (power to apply provisions about company arrangements and
administration) is amended as follows.

(2) At the end of the heading insert “etc”.

(3) In subsection (1), after “by order” insert “—

(a) 5provide for Part A1 of the Insolvency Act 1986 (moratorium)
to apply (with or without modifications) in relation to
registered societies;

(b) ”.

(4) After subsection (3), insert—

“(3A) 10The order may not make any provision that could be made under
subsection (3B) or (3C).

(3B) The Welsh Ministers may by regulations made by statutory
instrument make provision under the law of England and Wales for
Part A1 of the Insolvency Act 1986 to apply (with or without
15modifications) in relation to a society that is registered as a social
landlord under Part 1 of the Housing Act 1996.

(3C) The Scottish Ministers may by regulations make provision under the
law of Scotland for Part A1 of the Insolvency Act 1986 to apply (with
or without modifications) in relation to a society that is registered as
20a social landlord under Part 2 of the Housing (Scotland) Act 2010
(asp 17).”

(5) In subsection (4), for “The order” substitute “An order or regulations under
this section”.

(6) After subsection (5) insert—

“(5A) 25A statutory instrument containing regulations under subsection (3B)
is subject to annulment in pursuance of a resolution of Senedd
Cymru.

(5B) Regulations made by the Scottish Ministers under subsection (3C)
are subject to the negative procedure (see section 28 of the
30Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10)2010 (asp 10)).”

53 In section 147 (regulations and orders), in subsection (3), for “97 or 118”
substitute “or 97, or an order under section 118,”.

The Co-operative and Community Benefit Societies and Credit Unions (Arrangements,
Reconstructions and Administration) Order 2014 (S.I. 2014/229S.I. 2014/229)

54 35In Article 1 of the Co-operative and Community Benefit Societies and Credit
Unions (Arrangements, Reconstructions and Administration) Order 2014
(citation, commencement and interpretation)—

(a) in paragraph (2), in the definition of “the 1986 Act”, at the end insert
“(see also paragraph (5))”;

(b) 40after paragraph (4) insert—

“(5) In this Order a reference to the 1986 Act is to the 1986 Act
without the amendments made by section 1 of, and
Schedules 1 to 3 to, the Corporate Insolvency and
Governance Act 2020.”

The International Interests in Aircraft Equipment (Cape Town Convention) Regulations 2015

55 (1) Regulation 37 of the International Interests in Aircraft Equipment (Cape
Town Convention) Regulations 2015 (S.I. 2015/912S.I. 2015/912) is amended as follows.

(2) After paragraph (3) insert—

“(3A) 5Where the insolvency-related event is the coming into force of a
moratorium for a company under Part A1 of the Insolvency Act 1986,
references in this regulation to the “insolvency office holder” are to
the company.”

(3) In paragraph (12)—

(a) 10in sub-paragraph (a) omit “Part 1 of the Insolvency Act 1986 (in the
case of company voluntary arrangements) and”;

(b) omit sub-paragraph (i).

(4) After paragraph (12) insert—

“(12A) Where this regulation applies by virtue of a moratorium for a
15company coming into force under Part A1 of the Insolvency Act
1986—

(a) the provisions of this regulation are in addition to the
provisions of Part A1 of that Act;

(b) the notices under section A8 of that Act must include a
20statement that this regulation applies, together with a
statement of the effect of the application of this regulation;

(c) section A21 of that Act (restrictions on enforcement) does not
apply in relation to the aircraft object after the end of the
waiting period under this regulation;

(d) 25sections A29 to A32 of that Act (provisions about disposal of
property) do not apply to the aircraft object;

(e) the end of the waiting period under this regulation is without
prejudice to the application of the provisions of Part A1 of
that Act in respect of assets to which these Regulations do not
30apply.”

Section 3

SCHEDULE 4 Moratoriums in Great Britain: temporary provision

Part 1 “Relevant period” and powers to turn off temporary provision

35“Relevant period”

1 In this Schedule “relevant period” means the period which—

(a) begins with the day on which this Schedule comes into force, and

(b) ends with 30 June 2020 or one month after the coming into force of
this Act, whichever is the later.

Power to turn off particular provisions of Part 2 of this Schedule early

2 (1) The Secretary of State may by regulations made by statutory instrument
provide for any provision made by Part 2 of this Schedule to cease to have
effect before the end of the relevant period.

(2) 5The regulations may include transitional provision or savings.

(3) A statutory instrument containing regulations under sub-paragraph (1) is
subject to annulment in pursuance of a resolution of either House of
Parliament.

Power to turn off provisions of Parts 3 and 4 of this Schedule early etc

3 10Rules under section 411 of the Insolvency Act 1986 may provide for any
provision made by paragraphs 13 to 51 or 53 to 90 to cease to have effect
before the end of the relevant period.

4 Rules under section 411 of the Insolvency Act 1986 may make transitional
provision or savings in connection with any provision made by paragraphs
1513 to 51 or 53 to 90 ceasing to have effect (whether by virtue of paragraph 3
or 12).

Part 2 Modifications to primary legislation

“Eligible” company: additional exclusion

5 20During the relevant period, a company is not eligible for the purposes of
section A3, A4 or A5 of the Insolvency Act 1986 if the company—

(a) has permission under Part 4A of the Financial Services and Markets
Act 2000 to carry on a regulated activity within the meaning of that
Act, and

(b) 25is not subject to a requirement imposed under that Act to refrain
from holding money for clients.

Relaxation of conditions for obtaining moratorium etc

6 (1) For the purposes of obtaining a moratorium under section A3 of the
Insolvency Act 1986 during the relevant period—

(a) 30section A3 of that Act has effect as if subsection (1)(a) were omitted;

(b) section A6(1)(e) of that Act has effect as if at the end there were
inserted “or would do so if it were not for any worsening of the
financial position of the company for reasons relating to
coronavirus”;

(c) 35Schedule ZA1 to that Act has effect as if paragraph 2(1)(b) and (2)(b)
were omitted.

(2) During the relevant period, only an overseas company may obtain a
moratorium under section A4 of the Insolvency Act 1986.

7 In relation to an application for a moratorium made under section A4 or A5
40of the Insolvency Act 1986 during the relevant period—

(a) section A6(1)(e) of that Act has effect as if at the end there were
inserted “or would do so if it were not for any worsening of the

financial position of the company for reasons relating to
coronavirus”;

(b) Schedule ZA1 to that Act has effect as if paragraph 2(1)(b) and (2)(b)
were omitted.

5Relaxation of conditions for extending moratorium obtained during relevant period

8 (1) This paragraph applies in relation to a moratorium that comes into force
during the relevant period.

(2) For the purposes of extending the moratorium under section A10 or A11 of
the Insolvency Act 1986, subsection (1)(d) of that section has effect as if at the
10end there were inserted “or would do so if it were not for any worsening of
the financial position of the company for reasons relating to coronavirus”.

(3) In relation to an application under section A13 of the Insolvency Act 1986
that the moratorium be extended, subsection (2)(d) of that section has effect
as if at the end there were inserted “or would do so if it were not for any
15worsening of the financial position of the company for reasons relating to
coronavirus”.

Monitoring of moratorium obtained during relevant period

9 In relation to a moratorium that comes into force during the relevant period,
section A35(1) of the Insolvency Act 1986 has effect as if for the words from
20“it remains likely” to the end there were substituted “—

“(a) it is likely that the moratorium will result in the rescue of the
company as a going concern, or

(b) that, if one were to disregard any worsening of the financial
position of the company for reasons relating to coronavirus,
25it is likely that the moratorium would result in the rescue of
the company as a going concern.”

Termination of moratorium obtained during relevant period

10 In relation to a moratorium that comes into force during the relevant period,
section A38(1) of the Insolvency Act 1986 has effect as if for paragraph (a)
30there were substituted—

“(a) the monitor thinks—

(i) that the moratorium is not likely to result in the rescue
of the company as a going concern, and

(ii) that, even if one were to disregard any worsening of
35the financial position of the company for reasons
relating to coronavirus, the moratorium would not be
likely to result in the rescue of the company as a going
concern,”.

“Coronavirus”

11 40In the modifications made by this Part of this Schedule “coronavirus” means
severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2).

Part 3 Temporary rules: England and Wales

Introductory

12 Paragraphs 13 to 51 cease to have effect at the end of the relevant period,
5subject to paragraph 3.

Definition of “the court”

13 Section A52(1) of the Insolvency Act 1986 has effect as if for the definition of
“the court” there were substituted—

• “““the court”, in relation to a company, means a court having
  10jurisdiction to wind up the company;”.

Content of documents relating to the obtaining or extending of a moratorium: general

14 A notice or statement under section A6(1), A8(2), A10(1), A11(1) or A13(2) of
the Insolvency Act 1986 must state—

(a) the provision under which it is given or made,

(b) 15the nature of the notice or statement,

(c) the date of the notice or statement, and

(d) the identification details for the company to which it relates.

Authentication of documents relating to obtaining or extending moratorium: general

15 (1) A notice or statement under section A6(1), A10(1), A11(1) or A13(2) of the
20Insolvency Act 1986 must be authenticated by or on behalf of the person
giving the notice or making the statement.

(2) A notice under section A8(2)(a) of the Insolvency Act 1986 must be
authenticated by the monitor.

(3) Rule 1.5 of the England and Wales Insolvency Rules applies for the purposes
25of authentication under this paragraph.

Notice that directors wish to obtain a moratorium

16 A notice under section A6(1)(a) of the Insolvency Act 1986 must state—

(a) the company’s address for service, and

(b) the court (and where applicable, the division or district registry of
30that court) or hearing centre in which the documents are to be filed
under section A3 or the application under section A4 or A5 is to be
made.

Proposed monitor’s statement and consent to act

17 (1) A statement under section A6(1)(b) of the Insolvency Act 1986 must be
35headed “Proposed monitor’s statement and consent to act” and must contain
the following—

(a) a certificate that the proposed monitor is qualified to act as an
insolvency practitioner in relation to the company,

(b) the proposed monitor’s IP number,

(c) the name of the relevant recognised professional body which is the
source of the proposed monitor’s authorisation to act in relation to
the company, and

(d) a statement that the proposed monitor consents to act as monitor in
5relation to the company.

(2) In this paragraph “IP number” means the number assigned to an office-
holder as an insolvency practitioner by the Secretary of State.

Timing of statements for obtaining moratorium

18 Each statement under section A6(1)(b) to (e) of the Insolvency Act 1986 must
10be made within the period of 5 days ending with the day on which the
documents under section A6(1)(a) to (e) are filed with the court (or, if the
documents are filed on different days, the last of those days).

Notice by monitor where moratorium comes into force

19 A notice under section A8(2) of the Insolvency Act 1986 must—

(a) 15state that it is given by the monitor acting in that capacity, and

(b) state the name and contact details of the monitor.

Notice that directors wish to extend a moratorium

20 A notice under section A10(1)(a) or A11(1)(a) of the Insolvency Act 1986
must state—

(a) 20the company’s address for service, and

(b) the court (and where applicable, the division or district registry of
that court) or hearing centre in which the notice is to be filed.

Extension under section A10 or A11 of the Insolvency Act 1986: notices and statements

21 A statement by the monitor under section A10(1)(d) or A11(1)(d) of the
25Insolvency Act 1986 must contain contact details of the monitor.

Timing of statements for extension under section A10 or A11

22 Each statement under section A10(1)(b) to (d) or A11(1)(b) to (e) of the
Insolvency Act 1986 must be made within the period of 3 days ending with
the day on which the documents under section A10(1)(a) to (d) or A11(1)(a)
30to (e) are filed with the court (or, if the documents are filed on different days,
the last of those days).

Obtaining creditor consent: qualifying decision procedure

23 (1) The following apply, so far as relevant, for the purposes of a decision to
consent to a revised end date for a moratorium under section A12 of the
35Insolvency Act 1986—

(a) Part 15 of the England and Wales Insolvency Rules (decision
making), apart from rule 15.8(f) and (g);

(b) Part 16 of the England and Wales Insolvency Rules (proxies), apart
from rule 16.7.

(2) 40In its application by virtue of sub-paragraph (1), Part 15 has effect subject to
the modifications set out in paragraphs 24 to 28.

24 Rule 15.11 of the England and Wales Insolvency Rules (notice of decision
procedures etc) has effect as if, before the first entry in the table, there were
inserted—

25 10Rule 15.28 of the England and Wales Insolvency Rules (creditors’ voting
rights) has effect as if, before paragraph (1), there were inserted—

“(A1) A pre-moratorium creditor is entitled to vote in a decision procedure
under section A12 of the Act only if—

(a) the creditor has delivered to the convener a proof of the debt
15claimed in accordance with paragraph (3) including any
calculation for the purposes of rule 15.31 or 15.32, and

(b) the proof was received by the convener—

(i) not later than the decision date, or in the case of a
meeting, 4pm on the business day before the meeting,
20or

(ii) in the case of a meeting, later than the time given in
sub-paragraph (i) where the chair is content to accept
the proof; and

(c) the proof has been admitted for the purposes of entitlement
25to vote.”

26 Rule 15.31 of the England and Wales Insolvency Rules (calculation of voting
rights) has effect as if—

(a) before paragraph (1) there were inserted—

“(A1) In relation to a decision to consent to a revised end date for a
30moratorium under section A12 of the Act votes are calculated
according to the amount of each creditor’s claim at the
decision date.”;

(b) after paragraph (2) there were inserted—

“(2A) But in relation to a decision to consent to a revised end date
35for a moratorium under section A12 of the Act, a debt of an
unliquidated or unascertained amount is to be valued at £1
for the purposes of voting unless the convener or chair or an
appointed person decides to put a higher value on it.”;

(c) in paragraph (6), after sub-paragraph (b) there were inserted—

“(c) 40where the decision relates to whether to consent to a
revised end date for a moratorium under section A12
of the Act.”

27 Rule 15.32 of the England and Wales Insolvency Rules (calculation of voting
rights: special cases) has effect as if, before paragraph (1), there were

inserted—

“(A1) In relation to a decision to consent to a revised end date for a
moratorium under section A12 of the Act, a pre-moratorium creditor
under a hire-purchase agreement is entitled to vote in respect of the
5amount of the debt due and payable by the company at the decision
date.

(B1) In calculating the amount of any debt for the purpose of paragraph
(A1), no account is to be taken of any amount attributable to the
exercise of any right under the relevant agreement so far as the right
10has become exercisable solely by virtue of a moratorium for the
company coming into force.”

28 Rule 15.34 of the England and Wales Insolvency Rules (requisite majorities)
has effect as if, before paragraph (1), there were inserted—

“(A1) Subject to paragraph (B1), a decision to consent to a revised end date
15for a moratorium under section A12 of the Act is made if, of those
voting—

(a) a majority (in value) of the pre-moratorium creditors who are
secured creditors vote in favour of the proposed decision,
and

(b) 20a majority (in value) of the pre-moratorium creditors who are
unsecured creditors vote in favour of the proposed decision.

(B1) But a decision to consent to a revised end date for a moratorium
under section A12 of the Act is not made if, of those voting either—

(a) a majority of the pre-moratorium creditors who are
25unconnected secured creditors vote against the proposed end
date, or

(b) a majority of the pre-moratorium creditors who are
unconnected unsecured creditors vote against the proposed
end date.

(C1) 30For the purposes of paragraph (B1)—

(a) a creditor is unconnected unless the convener or chair
decides that the creditor is connected, and

(b) the total value of the unconnected creditors is the total value
of those unconnected creditors whose claims have been
35admitted for voting.”

Content of application to the court for extension of moratorium

29 (1) An application by the directors of a company for the extension of a
moratorium under section A13 of the Insolvency Act 1986 must state—

(a) that it is made under that section,

(b) 40the length of the extension sought,

(c) identification details for the company to which the application
relates,

(d) the company’s address for service, and

(e) the court (and where applicable, the division or district registry of
45that court) or hearing centre in which the application is made.

(2) The application must be authenticated by or on behalf of the directors.

(3) Rule 1.5 of the England and Wales Insolvency Rules applies for the purposes
of authentication under sub-paragraph (2).

Timing of statements accompanying application to court for extension of moratorium

30 A statement under section A13(2) must be made within the period of 3 days
5ending with the day on which the application under that section is made.

Notices about change in end of moratorium

31 (1) A notice under section A17(1) of the Insolvency Act 1986 must be given
within the period of 5 days beginning with the day on which the duty to give
the notice arises.

(2) 10The notice must state—

(a) the name of the company to which it relates, and

(b) the provision by virtue of which the moratorium was extended or
came to an end.

32 (1) A notice under section A17(2) or (3) of the Insolvency Act 1986 must be given
15within the period of 5 days beginning with the day on which the duty to give
the notice arises.

(2) The notice must state—

(a) the provision under which it is given,

(b) the nature of the notice,

(c) 20the date of the notice,

(d) that it is given by the monitor acting in that capacity,

(e) the name and contact details of the monitor, and

(f) the identification details for the company to which it relates.

(3) A notice under section A17(2) or (3) of the Insolvency Act 1986 that is given
25to the registrar of companies must be authenticated by or on behalf of the
monitor.

(4) Rule 1.5 of the England and Wales Insolvency Rules applies for the purposes
of authentication under sub-paragraph (3).

33 Where a moratorium comes to an end under section A16 of the Insolvency
30Act 1986 because the company has entered into a relevant insolvency
procedure within the meaning of that section, the notices under section
A17(1) and (2) must state—

(a) the date on which the company entered into the relevant insolvency
procedure, and

(b) 35the name and contact details of the supervisor of the voluntary
arrangement, the administrator or the liquidator.

34 (1) A notice under section A17(4) of the Insolvency Act 1986 must be given
within the period of 3 business days beginning with the day on which the
notice under section A38(1) of that Act is filed with the court.

(2) 40The notice under section A17(4) of that Act must be accompanied by the
notice that the monitor has filed with the court under section A38(1) of that
Act.

Notification by directors of insolvency proceedings etc

35 (1) A notice under section A24(1) of the Insolvency Act 1986 must be given
before the period of 3 days ending with the day on which the step mentioned
there is taken.

(2) 5A notice under section A24(2) of the Insolvency Act 1986 must be given
within the period of 3 days beginning with the day on which the duty to give
the notice arises.

Notice of termination of moratorium

36 (1) A notice under section A38(1) of the Insolvency Act 1986 must be filed with
10the court as soon as practicable after the duty in that subsection arises.

(2) The notice must state—

(a) the provision under which it is given,

(b) the nature of the notice,

(c) the date of the notice,

(d) 15the name and contact details of the monitor,

(e) the identification details for the company to which it relates,

(f) the grounds on which the moratorium is being terminated,

(g) the monitor’s reasons for concluding that those grounds are made
out,

(h) 20the date on which the monitor concluded that those grounds were
made out, and

(i) the court (and where applicable, the division or district registry of
that court) or hearing centre in which the notice is to be filed.

(3) The notice must be authenticated by or on behalf of the monitor.

(4) 25Rule 1.5 of the England and Wales Insolvency Rules applies for the purposes
of authentication under sub-paragraph (3).

Termination of moratorium under section A38(1)(d) of the Insolvency Act 1986

37 For the purposes of deciding whether to bring a moratorium to an end under
section A38(1)(d) of the Insolvency Act 1986 the monitor must disregard—

(a) 30any debts that the monitor has reasonable grounds for thinking are
likely to be paid within 5 days of the decision, and

(b) any debts in respect of which the creditor has agreed to defer
payment until a time that is later than the decision.

Replacement of monitor or additional monitor: statement and consent to act

38 (1) 35A statement under section A39(4) of the Insolvency Act 1986 must be headed
“Proposed monitor’s statement and consent to act” and must contain the
following—

(a) a certificate that the proposed monitor is qualified to act as an
insolvency practitioner in relation to the company,

(b) 40the proposed monitor’s IP number,

(c) the name of the relevant recognised professional body which is the
source of the proposed monitor’s authorisation to act in relation to
the company, and