A free-standing moratorium for financially distressed but ultimately viable companies was introduced in 2020. It is sometimes called a Part A1 moratorium, after the part of the Insolvency Act 1986 which provides for it.
The Part A1 moratorium affords companies breathing space to pursue restructuring efforts, by prohibiting most types of creditor action. Despite its relatively infrequent use to date, it is a welcome tool for business rescue. As with all types of restructuring and rescue processes, early engagement with restructuring professionals increases the chances of successfully deploying a moratorium to rescue a business.
In a recently published High Court decision from February 2023, ICC Judge Greenwood looked at the test to be app…
Read the full article at: https://www.dlapiper.com/en-gb/insights/publications/2023/11/high-court-exercises-its-discretion-to-grant-a-moratorium-in-favour-of-company-subject-to-a