Since the introduction of the Corporate Insolvency and Governance Act 2020 (CIGA) and the creation of the new Part 26A restructuring plan procedure, questions have been raised about whether the cost of using such a procedure would restrict its use to larger, better capitalised companies.
In our previous update, we summarised the findings in the Insolvency Service's interim report on the implementation of certain CIGA measures, including the use of the Part 26A restructuring plan. This confirmed the concerns of many in the restructuring industry regarding the costs of implementing a restructuring plan. In particular, the Insolvency Service noted that restructuring plans are seen as too costly and time consuming for use in the SME market. The Insolvency Service pointed to the requirement for two Court hearings and the required level of information disclosure as contributing factors to the high expense involved in implementing a restructuring plan.