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One of the most important post-Covid-19 questions: how should insolvency law operate?

Time to rethink the relationship between creditors and debtors

By James Mather  

Silas Stein/DPA/PA Images

During this early phase of the Covid-19 crisis, the government’s support for businesses has rightly focused on preserving workforces, deferring liabilities and improving access to cash. But this has merely kicked the fizzing can of debt down the road. It seems likely that, once the lockdown ends, huge numbers of businesses will survey the scene and find that, despite government assistance, they have accumulated hopelessly unpayable debts.

At that point, the operation of the insolvency laws will do much…

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