In June 2020 the Corporate Insolvency and Governance Act introduced insolvency Moratorium’s as a company rescue tool for companies in financial distress.
A Moratorium gives a company breathing space from its creditors to enable a plan to be formulated to restructure its debts. During this period no legal action can be taken against the company, and creditors cannot chase payment of pre-Moratorium debts. The purpose of a Moratorium is to rescue the company as a going concern.
Initially the Moratorium will last for 20 days, but this can be extended further if necessary.
In order to enter a Moratorium, the Board must appoint a licenced insolvency practitioner to act as the monitor for the company. At Cork Gully our insolvency practitioners will work with the Board, the company’s creditors and other stakeholders to oversee the terms of the Moratorium. Moratorium’s require certain conditions are adhered to, which include:
- ensuring all goods and services provided during the Moratorium are paid for;
- permission to obtain credit, grant security and/or dispose of assets; and
- meeting certain rent obligations and financial service contracts.
At Cork Gully our team of experienced Insolvency Practitioners will provide advice and oversee the Moratorium to ensure the conditions for the Moratorium are met, assess the viability for the company to be rescued as a going concern, and plan a suitable exit strategy from Moratorium.