Considerations for directors and a test for existing insolvency laws (King & Wood Mallesons)
As part of its economic response to the COVID-19 pandemic, the Government passed a ‘temporary safe harbour’ insolvency measure. It suspends, (for six months if not extended), the current ‘insolvent trading’ regime whereby directors can be personally liable for debts incurred by their company at a time it is insolvent.
This alert by King & Wood Mallesons explains the key considerations for directors under the new temporary rules. It also discusses the possibility that if used wisely, the increased flexibility they allow will prove a more effective way for companies and creditors alike to navigate financial distress in the future. More