New rules for winding up petitions

At the start of the coronavirus pandemic last year the government introduced a range of measures aimed at protecting businesses from the associated financial uncertainty. Whilst a number of those measures have since been relaxed, new limited restrictions on the use of winding up petitions have recently been announced.

The original measures

Some of the key measures introduced by the Corporate Insolvency and Governance Act 2020 (CIGA) protected a company from actions by a creditor. In particular with effect from 1 March 2020, there was:

• a blanket prohibition on presenting a winding-up petition based on a statutory demand served on or after 1 March 2020; and
• a restriction on a creditor winding up a company where the company's inability to pay its debts was due to the financial effects of the pandemic.

Those restrictions expired on 30 September 2021.