The U.K. government is loosening its bankruptcy rules to allow struggling businesses to continue trading if they can’t pay their debts because of the impact of the coronavirus, Bloomberg News reported. In another sign of how the pandemic is forcing governments to upend policy, Business Secretary Alok Sharma said that the changes would allow British companies being reorganized to access supplies and raw materials, and not be placed into administration by creditors. There will also be a clause that temporarily removes the threat of personal liability for company directors during the pandemic. “These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends, whilst ensuring creditors get the best return possible in the circumstances,” said Sharma, who hosted the government’s daily coronavirus briefing because Prime Minister Boris Johnson is holed up with Covid-19. KPMG and Deloitte, together with other accounting firms with sizable business restructuring divisions, have been pushing the government to introduce softer legislation. Ministers were already looking at allowing beleaguered companies to access government-backed loans through commercial banks, Bloomberg reported on Friday.
