Proposals for a restructuring moratorium by the UK Insolvency Service - ACT response

The Insolvency Service has been consulting on the government’s proposals to introduce a UK Insolvency Moratorium somewhat along the lines of the US Chapter 11, with the firm still in the hands of management.

The Proposals for a restructuring moratorium to have been put forward to address the challenges of refinancing and restructuring of existing debts within many of the companies who set up their finance in easier times and may now need a breathing space to complete their renegotiations.

The ACT welcomes the proposals as helping to create an environment where companies can be helped to survive rather than be pushed too readily into administration. However we believe the circumstances where the three month moratorium can be applied will be limited.