GOVERNANCE & SECURITIES LAW FOCUS
Proxima Nova A ExCn 35pt
MAY 2020/LATIN AMERICA
Below is a summary of the main developments in US, EU, and UK corporate governance and securities law since our last update in February 2020.
Financial regulatory developments are available here.
IN THIS ISSUE
From 6 April 2020, all non-UK resident corporate landlords (NRLs) are within the charge to UK corporation tax on the income from their UK property rental business (PRB) and on capital gains from direct or indirect disposals of UK real estate. This marks a significant change for NRLs, which were previously subject to UK income tax on their PRB income and (until 6 April 2019) exempt from UK tax on their capital gains.
The outbreak of the novel coronavirus pandemic (COVID-19 or Coronavirus) has had and will continue to have wide-ranging implications for businesses, governments and institutions across markets and industries. Shearman & Sterling (Shearman) has created a dedicated resource hub containing information on the potential impact this pandemic may have on businesses, and what businesses can do to prepare and succeed in this rapidly evolving space going forward. The sections that follow cover select key topics that may be of particular interest at the time of writing.
Background
The COVID-19 pandemic has led certain infrastructure businesses to face significant disruptions to operations and revenues, giving rise in many instances to breaches or potential breaches of finance documentation. This article considers at high-level issues to be mindful of when undertaking waiver processes to address such breaches.
Potential Waivers
Financial Covenants
As outlined in our client publication of March 27, 2020 (Update for Borrowers and Lenders in Germany), by a new law effective since March 27, 2020 (the “German Covid-19 Insolvency Law Amendment”), the obligation of the management of a legal person pursuant to section 15a of the German Insolvency Act (“German InsO”) has been suspended until September 30, 2020 if certain conditions are met.
As COVID-19 cases continue to span the globe, a significant economic impact is being felt globally. Businesses have been disrupted, cash flows have been interrupted and economies have been thrown into a huge negative shock.
In many countries across the world, governments have amended their insolvency and corporation legislation, or enacted new legislation, in order to provide temporary relief to entities in financial distress as a result of the COVID-19 pandemic. This blog examines the impact of these measures alongside the current position in Hong Kong and Singapore.
The UK government has announced that it will introduce legislation at the earliest opportunity to, among other things, give businesses greater flexibility to help them emerge intact at the end of the pandemic.
On 28 March 2020, the Secretary of State for Business, Energy and Industrial Strategy (BEIS) announced key measures to protect companies and businesses facing major funding and operational difficulties in the current COVID-19 pandemic.[1] The measures will involve the Government bringing forward legislation at the earliest opportunity to amend current U.K. insolvency law to give firms extra time and space to weather the current storm while ensuring that creditors can get the best return possible in the circumstances.
In light of the growing pandemic of COVID-19 the German government has decided on a number of unprecedented restrictions for all areas of private and business life which were unimaginable just a few weeks ago. As a result, many production facilities and businesses had to shut down. While the consequences for many companies are already dramatic, the full impact on the economy is still unpredictable as it is unclear how long the current restrictions will subsist.