Recent Government COVID-19 Measures to Rescue Companies and Help them Survive
In response to the economic and financial shock from the pandemic, the Government has put into place significant new measures to support companies survive and recover. The Corporate Insolvency and Governance Act 2020 (CIG Act), has introduced initiatives to help company directors and their advisers to focus on business and financial recovery.
These changes are:
- New moratorium
- New turnaround/restructuring plan process
- Restrictions on termination of contracts for the supply of goods and services.
- Restrictions on using winding-up processes
- Temporary changes to wrongful trading rules
- Relaxation of meetings and filing requirements to give companies greater flexibility.
A key benefit of the new moratorium procedure is that it gives businesses enhanced protection from certain creditor actions such as winding up petition, and from wrongful trading risks the directors otherwise face.
Another advantage is that the existing directors remain in control to run the business, overseen by a ‘monitor’ who is a licenced insolvency practitioner. Also, it allows the directors to choose which monitor they want to appoint and work with.
Who Is It For?
The support is intended for companies that are in trouble due to the problems caused by Covid-19. The typical characteristics of these companies are:
- Cashflow problems caused by or exacerbated by the pandemic
- Performing well previously
- Viable businesses that are likely to trade successfully in future
- Require time to recover and repay debts
The moratorium is to help turnaround the business and recover it back to profitability and healthy cashflow. It can be extended up to a year with the approval of creditors or by court order, and provide struggling businesses with much needed headroom to deliver the turnaround.
This can be successfully achieved with the help of a turnaround specialist who works alongside the directors to advise, keep the recovery on track, and make it happen.
Clarity can help you to successfully apply for and formulate a turnaround plan for your company under these new rules, and then support you to deliver it.
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- Tracy Bedwell, MD of global M&D company
Obi is a person who can make a real difference through his ability to understand the key challenges involved in a turnaround or business improvement situation. He can work with stakeholders to both formulate a turnaround or improvement plan but most importantly to get buy in and actually deliver the plan. He has experience of a wide variety of industries primarily with SME's in the private sector and in the NHS in the public sector.
Stephen Burke, FD and Transformation Specialist
I have worked with Obi on a number of projects and found him to be diligent, well informed, highly experienced and able to follow through and deliver his work. I would certainly recommend him for any consulting engagements.
Jonathan Webb, CEO Clarity Associates Ltd
I have known and worked with Obi for the last ten years on a number of different projects in the NHS. All of these assignments have been complex, challenging and have required clinical, operational and financial changes to be made at pace. What sets Obi apart is his ability to take people with him through these changes and to communicate them clearly and appropriately to those impacted. The client is always disappointed when the work is complete as Obi is a joy to work with and has a passion for ensuring that the changes made are sustainable and management teams and their staff develop their capabilities/capacity along the way.
Iain Alexander - Partner, PwC, Leader Government & Health Industries Restructuring
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