After last year’s significant reforms to Australia’s insolvency framework, the Government has demonstrated a further commitment to simplifying and streamlining insolvency law to allow viable businesses that encounter economic challenges to restructure and continue trading.

This commitment is demonstrated by the Government continuing to examine ways to improve Australia's insolvency laws, including consulting on options to:

The Budget reaffirmed the Government’s commitment to implementing reforms to support consumers and businesses affected by COVID-19.

The Government confirmed the implementation of a number of measures designed to reduce the regulatory burden to ensure a timely flow of credit and resolution for distressed business. These include:

As the impact of COVID-19 is felt across the globe, many airlines have grounded their fleet, ceased operating flights, and are potentially in breach of any financial covenants that they may have in their debt or lease documents, if not already in technical insolvency.

If an airline does go into insolvency, what should banks and lessors do to protect their assets? What issues, practical and legal, should they be aware of?

The Warning Signs

Beauty Brands, LLC, along with two subsidiaries and affiliates, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 19-10031).

Angel Medical Systems, Inc., a developer of medical devices based in Eatontown, NJ, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12903).

Alcor Energy, LLC filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12839).

White Eagle Asset Portfolio, LP, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12808).

Checkout Holding Corp. (dba Catalina Marketing), along with ten affiliates and subsidiaries, has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12794).

interTouch Holdings LLC and its affiliate, interTouch TopCo LLC, have both filed petitions for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-12772).

Argos Therapeutics, Inc. (f/k/a Merix Bioscience, Inc.) has filed a petition for relief under chapter 11 in the Bankruptcy Court for the District of Delaware (Case No. 18-12714).