Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

CIGA 2020 temporary winding-up petition regime (1 October 2021–31 March 2022): conditions A–D, creditor notice, £10,000 threshold and rent exclusions

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

ARCHIVED: This Practice Note has been archived and is not maintained

The coronavirus (COVID-19) outbreak, together with UK government lockdowns and social distancing requirements, had a deep impact on businesses and the wider economy. On 20 March 2020, the government directed the closure of venues including restaurants, pubs and leisure centres; then, on 23 March 2020, a nationwide lockdown commenced, effectively putting large areas of the private sector into hibernation.

Enforced closures endangered the financial stability of many previously healthy companies and, for those already in difficulty, became the decisive breaking point. To soften the economic fallout of coronavirus and keep the economy functioning, the government introduced a suite of measures, ranging from financial support programmes to legislative changes. For more on available financial assistance, refer to Practice Note: Coronavirus (COVID-19)—summary of government financial support to businesses.

To shield commercial tenants, the government also stated it would prevent landlords from seeking forfeiture of a lease for non-payment of rent or other sums due under the lease. In reaction, some landlords moved to file winding-up petitions against tenant companies...

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Web page updated on 21/05/2026

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