Insolvency law risk for suppliers tied into failed business

With the 30 September deadline for SMEs to terminate contracts if they supply an insolvent client fast approaching, Ian Timlin at Conexus warns suppliers to check contracts closely to avoid costly commitments under the Corporate Insolvency and Governance Act 2020

The new law that was introduced during the height of the pandemic to provide ‘breathing space’ for companies that were struggling financially, has been made permanent and may have serious consequences for some organisations. The introduction of s.233B of the Insolvency Act as inserted by the Corporate Insolvency and Governance Act 2020 s.14 raises a number of concerns for companies moving forward and could impact their own financial situation.

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