On 26 August the UK Government announced its intention to introduce radical reforms to insolvency law in the catchily named consultation paper "Insolvency and Corporate Governance – Government Response". Despite the 82 pages, the government kept their cards relatively close to their chest choosing not to reveal their big plans but with suggestions about the reforms ahead to "enable more companies not only to survive, but to thrive".
Most notably the paper proposed the introduction of a new 3 month moratorium to "aid business rescue" for financially distressed companies which are ultimately viable. By allowing these companies a period of time when creditors cannot take action against the company, the company could look at alternative restructuring opportunities before they had passed the point of no return.
Available to (almost) all companies who could meet the currently undisclosed qualifying criteria, the directors would remain in control of the company throughout the moratorium process under the watchful eye of an authorised supervisor. Tasked with protecting the creditors' interests the authorised supervisor would be in charge of monitoring the company's compliance with the qualifying conditions throughout the moratorium and providing support and guidance where needed.
The paper reassured it would not be all bad news for creditors though (who may be prevented from enforcing their security), but by encouraging early intervention and the aptly named "rescue-finance", the creditor would find their security in a better financial position than before.