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By Sandrine Bradley
LONDON (LPC) – The UK government could face hefty losses on loans made to struggling businesses during the Covid-19 pandemic due to its new insolvency law that can force lenders to accept unfavourable terms during a debt restructuring process.
The new Restructuring Plan’, part of the government’s Corporate Insolvency & Governance Bill being debated in parliament this week, empowers one class of creditors to force a debt restructuring plan on another class of creditors, in what is known as a cross class cramdown.
It therefore gives a majority of creditors the power to force a debt restructuring onto a single class of creditors who do not agree with it.
This cou…
Read the full article at: https://wincountry.com/news/articles/2020/jun/04/uk-insolvency-law-poses-hefty-losses-for-government-backed-loans/1025928/?refer-section=business