Government announces restrictions on the use of statutory demands and winding up petitions
The Government has announced that they will introduce further temporary measures to protect commercial tenants against debt recovery actions during the Coronavirus pandemic. This is in addition to the measures already in place under the Coronavirus Act which suspends forfeiture rights and prevents all commercial tenants from being removed from properties until 30 June 2020.
The pending legislation, which will be in the Corporate Insolvency and Governance Bill, will include restrictions on issuing statutory demands and winding-up petitions. Under the new measures, any winding up petition that claims a company is unable to pay its debts must first be reviewed by the court to determine why as it will not be permitted to present petitions where the company’s inability to pay is the result of COVID-19.
The Government announcement sets out that the use of statutory demands made between 1 March and 30 June 2020 and winding up petitions presented from 27 April to 30 June 2020 will be temporary banned where a company is unable to settle its bills due to the Coronavirus pandemic. It is not clear at this stage whether this will only apply to the landlord and tenant relationship or to any company.