The Insolvency Service has published an interim report which evaluates three permanent changes to the insolvency regime as introduced by The Corporate Insolvency and Governance Act 2020 (CIGA): restructuring plans; the standalone moratorium and the restriction on contractual termination rights (so-called ipso facto clauses). The takeaway messages are as follows:

• The restructuring plan is regarded as a success, especially the cross-class cram-down mechanism where a scheme of arrangement would have fallen short before. But more work needs to be done to make the restructuring plan attractive to SMEs because of their time-consuming and expensive nature. The costs associated with challenging a restructuring plan are also seen as too high.
• The moratorium is seen as having satisfied its policy objectives but there are concerns that it alters pre-existing priorities in a subsequent insolvency. 
• The restrictions on ipso facto clauses are regarded as being a useful tool in the armoury of insolvency practitioners and those companies who enter formal insolvency proceedings. However it is still too early to assess their full impact as government measures introduced during the pandemic enabled many companies to avoid entering insolvency in the first place.   

The overall message is that these changes are positive and assist the rescue of companies as going concerns. 

The report represents the results of research undertaken in relation to the operation of CIGA in two stages, the second of which will now commence and involve interviews with the insolvency profession. The research will form the basis of the government's post-implementation review of these permanent measures, which is expected in June 2023.

It's true to say that more will inevitably be learned about the impact of these permanent CIGA measures as we emerge from the pandemic. According to the Insolvency Service's statistics, for example, between 26 June 2020 and 31 March 2022, 36 companies obtained a moratorium and 10 companies had a restructuring plan registered at Companies House. In other words, hardly startling figures and we can likely expect these measures to be more widely used in the coming months.