On 26 March 2020, the Insolvency Committee of City of London Law Society made a number of proposals to mitigate the short-term effects on business of COVID-19. The proposals, to be discussed with the Insolvency Service, include:
1. measures to limit winding up petitions, including directors being able to declare that the company is facing liquidity or operational challenges as a result of circumstances related to COVID-19, with the filing of such a declaration triggering a 90 days grace period;
2. expanding the grounds for seeking an interim moratorium (i.e. so creditors are unable to enforce their rights) to include a situation where directors have an intention to put in place measures to overcome a temporary COVID-19 related liquidity crisis in order to avoid insolvency, or, if that is not possible, appoint an administrator; and
3. amending 'wrongful trading' and directors' duties. For more information on wrongful trading see here https://quickreads.kemplittle.com/post/102g2bb/avoiding-wrongful-trading-during-the-covid-19-pandemic.
The detail of the proposal is here http://www.citysolicitors.org.uk/storage/2020/03/CLSL-Insolvency-Law-Committee-Paper-mitigating-the-effects-of-Covid-19-002-1.pdf
Update: Since this article was written, the Corporate Governance and Insolvency Bill has been laid before Parliament: read a recent update here.