As previously noted, the new Corporate Insolvency and Governance Bill, currently expected to be enacted in mid-June 2020, is likely significantly to impact many supplies of goods and services to companies that are or may be in financial distress. However, the effects are sufficiently far-reaching that they could impact the balance of rights in all supply chains and particularly the drafting of supply contracts, with an impact on both suppliers and their customers or clients.

Suppliers may seek to act now to mitigate or address the likely impact of the Bill and to maximise the prospects of obtaining full payment. Since each supplier is likely also to be another supplier’s customer or client, any impact on one supplier is likely to have a knock-on impact on its suppliers and so on throughout the supply chain.

Our Restructuring, Turnaround and Insolvency team has analysed the likely impact on supply chains in this note on our website. For an analysis of the effect on other key groups, see the team’s notes on the impact on secured and unsecured bank debt and on landlords’ recoveries in an insolvency process.