Moratorium Section 3 and Schedule 4: temporary modifications in light of coronavirus Schedule 4
The Schedule sets out the "relevant period" for the provisions in Schedule 4. The relevant period will begin on the day on which Schedule 4 comes into force and end on 30 September 2020. The end date may be shortened or extended by regulations and may be extended more than once. There is also a power to cease the effect of any of the provisions in the Schedule before the end of the relevant period.
	During the relevant period, a company is not eligible for a moratorium if the company is a regulated company that (a) has a permission under Part 4A of the Financial Services and Markets Act 2000 to carry out regulated financial activities and (b) is not subject to any limitation under Financial Services and Markets Act 2000 preventing the company holding money for a client (whether on trust or otherwise).
	During the relevant period, the directors of an eligible company that is subject to an outstanding winding-up petition and is not an overseas company may obtain a moratorium for the company by filing the relevant documents at court (rather than by application to the court).
	During the relevant period, a modified statement from the monitor is required as part of the relevant documents set out in section A6. The monitor is required to disregard any worsening of the financial position of the company that relates to COVID-19. Paragraph 6(1)(b) of Part 2 of Schedule 4 has made an amendment in section A6(1)(e) of Insolvency Act 1986 by inserting at the end of it: "or would do so if it were not for any worsening of the financial position of the company for reasons relating to coronavirus". A modified statement will also be required when an extension to the moratorium is being sought in sections A10, A11 and A13.
	During the relevant period, companies that, within twelve months prior to filing for a moratorium have been subject to a previous moratorium, a CVA or in administration (but are not currently subject to a moratorium, CVA or in administration) are permitted to file or apply for a moratorium.
	When a company enters a moratorium during the relevant period, the monitor’s obligation to monitor the company’s affairs will be modified. The monitor will be required to form a view whether it is likely that the moratorium will result in the rescue of the company as a going concern, or that, if one were to disregard any worsening of the financial position of the company for reasons relating to coronavirus, it is likely that the moratorium would result in the rescue of the company as a going concern.
	When a company enters a moratorium during the relevant period, the monitor’s obligation to bring the moratorium to an end will be modified. If the monitor thinks that the moratorium is not likely to result in the rescue of the company as a going concern, and that, even if one were to disregard any worsening of the financial position of the company for reasons relating to coronavirus, the moratorium would not be likely to result in the rescue of the company as a going concern, the monitor must bring the moratorium to an end.
	Part 3 of this Schedule sets out provisions that will apply pending the necessary amendments being made to the Insolvency (England and Wales) Rules 2016 ("the Rules") and Part 4 of this Schedule sets out provisions that will apply pending the necessary amendments being made to the Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018 ("the Scottish Rules"). These temporary provisions will cease to have effect at the end of the relevant period (30 September 2020).
	With regard to England and Wales and Part 3 of the Schedule, the provisions ensure that the court dealing with a moratorium application is the court that has jurisdiction to wind up the company. Provision is made about the content and timing of the director’s notice to obtain and extend a moratorium, the proposed monitor’s statement and consent to act (including those of a replacement or additional monitor), the monitor’s notice to the company’s creditors and registrar of companies when the moratorium comes into force and the notices required for a change in the end date of the moratorium. Rules 1.4, 1.8 and 1.9 of the Rules apply regarding the format of documents in so far as they are relevant to any requirement imposed by provisions in Part 3 of the Schedule, and rule 1.5 of the Rules applies for the purposes of authentication where documents are required to be authenticated. Specified rules contained in Chapter 9 of Part 1 of the Rules apply in relation to the delivery of documents. In respect of applications to court, the provisions of the Civil Procedure Rules and any related Practice Directions apply for the purposes of proceedings under Part A1 of the Insolvency Act 1986 (the moratorium) together with rule 1.35 and specified and modified rules from Part 12 of the Rules. In addition, Part 3 of the Schedule draws on the relevant rules in Parts 15 and 16 of the Rules (with modifications) to apply the qualifying decision-making procedure (defined in the Insolvency Act 1986 section 246ZE), voting rights and majority rules when directors are seeking creditors’ consent to extend the moratorium. The notice period of the directors’ notice to the monitor before entering insolvency proceedings, and the contents of the monitor’s notice to the court to end the moratorium are specified. Part 3 of the Schedule also sets the priority of moratorium debts in a subsequent administration or winding up and sets a time limit on when a challenge can be made to a monitor’s fees by a subsequent administrator or liquidator. Information that must be used to identify and contact both the company and the monitor are listed. In deciding whether to bring the moratorium to an end, the monitor must disregard any debts that are likely to be paid within 5 days, and any debts which the creditor has agreed to defer until a later date.
	With regard to Scotland and Part 4 of the Schedule, the provisions ensure that the court dealing with a moratorium application is the court that has jurisdiction to wind up the company. Provision is made about the content and timing of the director’s notice to obtain and extend a moratorium, the proposed monitor’s statement and consent to act (including those of a replacement or additional monitor), the monitor’s notice to the company’s creditors and registrar of companies when the moratorium comes into force and the notices required for a change in the end date of the moratorium. Rules 1.5, 1.9 and 1.10 of the Scottish Rules apply regarding the format of documents in so far as they are relevant to any requirement imposed by provisions in Part 4 of the Schedule and rule 1.6 of the Scottish Rules applies for the purposes of authentication where documents are required to be authenticated. Specified rules contained in Chapter 9 of Part 1 of the Scottish Rules apply in relation to the delivery of documents. In addition, Part 4 of the Schedule draws on the relevant rules in Parts 5 and 6 of the Scottish Rules (with modifications) to apply the qualifying decision-making procedure, voting rights and majority rules when directors are seeking creditors’ consent to extend the moratorium. The notice period of the directors’ notice to the monitor before entering insolvency proceedings, and the contents of the monitor’s notice to the court to end the moratorium are specified. Part 4 of the Schedule also sets the priority of moratorium debts in a subsequent administration or winding up and sets a time limit on when a challenge can be made to a monitor’s fees by a subsequent administrator or liquidator. Information that may be used to identify and contact both the company and the monitor are listed. In deciding whether to bring the moratorium to an end, the monitor must disregard any debts that are likely to be paid within 5 days, and any debts which the creditor has agreed to defer until a later date.
	The effect of Part 5 of the Schedule is as set out in paragraph 164 above.