If the company were to go into liquidation or administration, the insolvency practitioner (or indeed any creditor) can seek an order from the court to make the directors personally responsible to pay them.
The procedure, if introduced, would allow a company that is in financial distress to make an application to court for a stay on all applications seeking to liquidate it during the pandemic period - a Covid-19 Stay Application.
In this case, the Covid-19 Stay Application is one that would suspend liquidation proceedings for the duration of the pandemic, for companies experiencing financial distress, and those which can demonstrate that without the stay, insolvency will be inevitable.
For the duration of this period, the company must appoint an Insolvency Act licensed insolvency practitioner to act as a Supervising Administrator (SA) who has a vital role to play in the Covid-19 Administration.
That would not be realistic in this situation given the significant number of companies facing difficulty yet there are only thirty odd licensed insolvency practitioners, making it therefore necessary for the directors to remain running the business.
