Corporate Governance and Insolvency Bill 2020 (CIGA)
The UK Government introduced CIGA 2020 last summer, with the aim to help businesses cope with the impact of Covid-19. The law sets in place various temporary and permanent measures to support businesses in financial difficulty.
The proposal of a restructuring plan makes up one of the three permanent fixtures into insolvency law.
Restructuring plan
Companies in severe financial difficulties are now allowed to propose a restructuring plan to its Creditors and Members.
When a business hits financial difficulty, it can restructure its model and the way it operates to become financial viable again and so it can continue trading.
You would need to call in people who are experts at rescuing and restructuring a business – such as an Insolvency Practitioner.
A business restructuring plan can enable you to continue trading and avoid liquidation and eventually going out of business. The good thing about this measure – and what separates it from other debt solutions – is that your creditors will be legally bound to honour the plan provided that the Court sanctions it and give it approval.