Restructuring Plans under the UK Corporate Insolvency and Governance Act 2020: A Critical Analysis of the New Mechanism for Companies in Financial Difficulties

Abstract

In recent years, United Kingdom corporate insolvency law has been the subject of much criticism concerning its impracticality for many insolvency cases – in terms of insolvency practitioners, or the economic stagnation to which companies are exposed, which places them in financial distress. Two developments in particular have contributed to the transformation: Brexit along with the developments in COVID-19 have had major ramifications for the UK's debt restructuring. In 2020, the UK's debt restructuring underwent a period of immense change. The UK Corporate Insolvency and Governance Act 2020 (CIGA) was enacted in June 2020, introducing both temporary and permanent changes for restructuring. Modelled on the English arrangement scheme, CIGA introduced notable enhancements for debt restructuring, including permanent changes such as the development of restructuring plans.