Coronavirus Blog Series:
Insolvency Statistics for August 2020
Published 24 September 2020
The Insolvency Service statistics show that in August 2020 there were 4 company insolvencies in Northern Ireland. These consisted of 2 CVLs and 2 administrations. There were no compulsory liquidations, CVAs or administrative receiverships. In the same period there were 107 individual insolvencies in Northern Ireland which consisted of 82 IVAs, 21 DROs and 4 bankruptcies.
In England & Wales there were a total of 778 company insolvencies which comprised of 586 creditors’ voluntary liquidations (CVLs), 66 compulsory liquidations, 110 administrations, 15 company voluntary arrangements (CVAs) and one receivership appointment. There were 1,332 DROs and 769 bankruptcies in August 2020 in England and Wales.
The Corporate Insolvency and Governance Act 2020 (Amendment of Certain Relevant Periods) Regulations (Northern Ireland) 2020 comes into force on 29 September 2020. In relation to company statutory demands and the restrictions on winding up petitions Schedule 11, paragraphs 1(3)(b) and 18(1)(b) now substitutes “30 September 2020” with “31 December 2020”.
Alongside the Act in England an Insolvency Practice Direction (“IPD”) came into force on 3 July 2020 and provides additional information in respect of winding up petitions and the “coronavirus test”. Paragraph 3 of the IPD states, amongst other things, that a petition will not be accepted for filing unless it contains a statement explaining the reasoning for non-payment of the debt. As such it is still possible to file creditors’ winding up petitions in England & Wales. Bankruptcy petitions are not affected and can be filed as normal as the Act relates to company matters.
The IPD is not however applicable in Northern Ireland. Under the latest Masters’ Court Guidance dated 21 September 2020 there is no change to the previous position concerning creditors’ petitions in that no new creditors’ petitions, either bankruptcy or winding-up, may be presented unless the circumstances are deemed to be exceptional and the Court has approved the presentation of the petition. Unlike England & Wales, in Northern Ireland no bankruptcy or winding up Orders will be made, even by consent of the parties, on foot of creditors’ petitions.
In light of that clear distinction between Northern Ireland and England & Wales creditors will have to consider what alternative legal remedies are open to them in Northern Ireland.
This article is for general guidance only and should not be regarded as a substitute for professional legal advice.