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UK Corporate Insolvency and Governance Act 2020: what the aviation industry needs to know about the new moratorium regime

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The Corporate Insolvency and Governance Act (the Act) which entered into force on 26 June 2020 represents the most significant insolvency reforms in the UK for a generation. 

In addition to some temporary measures addressing the economic fallout from Covid-19, the Act introduces permanent reforms in three key areas: (1) the introduction of a new statutory moratorium (Moratorium); (2) a ban on the operation of termination clauses in supply contracts triggered by insolvency proceedings (or so called ipso facto clauses); and (3) the introduction of a new pre-insolvency rescue and reorganisation procedure (the Restructuring Plan). Our detailed analysis of the various measures introduced by the Act can be accessed here.

In a three part series of bulletins, we analyse the implications of each of these permanent measures for the aviation industry. This first bulletin, co-authored by partners Jennifer Marshall and Paul Nelson and, associate Harini Viswanathan focusses on the implications of the new Moratorium for airlines, lessors and financiers.

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