Endgame in sight for the return of Creditor Winding Up Petitions
On the 21st of February 2023, the Department of Infrastructure, with assistance from the Department for the Economy, confirmed that they will introduce new legislation to fill a lacuna currently stalling the presentation of any Creditor Bankruptcy Petitions in Northern Ireland.
The new Insolvency (Amendment) Rules will introduce permanent procedural rules, effective from 13 March 2023, to enable the presentation of these petitions to recommence.
In 2020, a company moratorium procedure was introduced, allowing companies in financial difficulties the time to explore rescue and restructuring options free from creditor action. Temporary procedural rules were created to ensure effective operation of the moratorium and to provide certainty to all parties involved.
These temporary procedural rules lapsed at the end of March 2022 before permanent rules could be approved and introduced by the now-defunct NI Executive. This left a lacuna in our legislation forcing the Bankruptcy Master in Northern Ireland to issue guidance which effectively stalled the presentation of any Creditor Bankruptcy Petitions for the last 12 months.
The Department of Justice will now introduce permanent procedural rules deeming them to be in the public interest as they reintroduce a procedure previously in place and which had been agreed upon by Ministers and the Assembly.
We can expect the Master to soon issue fresh guidance to permit creditors to lodge Winding Up Petitions in the High Court with possible hearing dates prior to the summer of 2023.
If you would like any further information or advice, please contact Darren Toombs from the Insolvency & Restructuring team.
*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.