On March 25, 2020, the German parliament adopted a package of measures to mitigate the effects of the COVID-19 pandemic (“COVID-19 Relief Act”). This article contains an overview of the key measures for German companies, which are:

If the current coronavirus (COVID-19) situation persists, real estate lenders increasingly will be faced with the need to restructure loans in their portfolios. Lenders that held non-performing real estate loans during prior real estate downturns (e.g., 2008, 1990s) have no doubt embarked on the real estate workout process countless times before. However, with the passage of time, the lessons learned by real estate lenders of earlier eras may have faded from memory. Moreover, many of the lenders active in real estate finance today were not even on the scene during prior recessions.

As COVID-19 continues to cause widespread economic disruption, the UK government has announced lending measures to support struggling businesses. This alert summarises:

• the measures available;
• key legal considerations for directors hoping to take advantage of new debt; and
• practical steps directors can take to protect themselves from personal liability.

This alert is relevant to directors of disrupted, stressed, and distressed companies who are considering additional borrowing.

What has the government announced?

China Lumena New Materials Corp (in provisional liquidation) [2020] HKCFI 338 (decision made on 23 January 2020 and reasons given on 4 March 2020)

This is the first reported scheme of arrangement in Hong Kong seeking to compromise debt governed by PRC law. Under the Gibbs Rule, a foreign composition does not discharge a debt unless it is discharged under the law governing the debt. In this case, the Hong Kong Court considered an exception to the Gibbs Rule and more generally the principles of sanctioning a scheme.

Background

The High Court recently ruled that the general directors’ duties prescribed by sections 171-177 of the Companies Act 2006 (“CA 2006”) (the “General Duties”) continue to apply to directors after their company has entered administration or creditors’ voluntary liquidation (“CVL”). This is notwithstanding that after the appointment of an administrator or liquidator, the ability and rights of directors to control the company are legally and practically curtailed.

Currently, when a UK airline enters insolvency, its operations cease, aeroplanes are grounded and passengers are stranded – in part due to the heavy industry regulation and, in part, because of complex aeroplane financing arrangements. Any operational continuity enabling the repatriation of passengers would be a loss-making activity likely to deplete the amount of money available to the company’s creditors; a result that would be contrary to the aim of UK insolvency processes in general. This starkly contrasts with insolvent U.S. airlines, all of which have been in U.S.

Sit Kwong Lam v Petrolimex Singapore Pte. Ltd [2019] HKCA 1220案 (裁决日期：2019年11月1日)

But Ka Chon v Interactive Brokers LLC [2019] 5 HKC 238案 (裁决日期：2019年8月2日)

在Lasmos Limited v Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426一案中，当案件所涉债务是一项仲裁协议的标的时，公司法庭改变了原先在这种情况下如何裁定清盘程序的做法（被称为“Lasmos裁决”）。在近期的两起破产案件中，上诉法庭对Lasmos裁决发表了附带意见。

Lasmos案之前的裁决

上海华信国际集团有限公司（在中国大陆清算）[2020] HKCFI 167 (裁决日期：2020年1月13日)

这是香港法院首次向中国大陆法院指定的一家中国大陆公司的管理人发出承认令的案件。该案还考虑如果在送达第三债务人暂准令（garnishee order nisi）后，破产令在外国颁布，此时是否应将第三债务人暂准令转为绝对命令。

案件背景

上海华信国际集团有限公司（以下简称为“CEFC”）是一家在中国大陆注册成立的投资控股公司，是一家企业集团的一部分，该企业集团的业务包括资本融资、石油精炼和基础设施。 2019年11月，上海市第三中级人民法院（以下简称为“上海法院”）下令CEFC破产清算，并指定了联合管理人（以下简称为“管理人”）。

CEFC的资产包括对其在香港地区的子公司上海华信集团（香港）有限公司（以下简称为“香港子公司”）的重大债权，该子公司正在清算中。CEFC已就该债权提供债务证明。

CEFC Shanghai International Group Limited (in Liquidation in the Mainland of the People’s Republic of China) [2020] HKCFI 167 (date of judgement 13 January 2020)

This is the first case in which the Hong Kong Court granted a recognition order to administrators of a PRC company appointed by a PRC Court. The case also considered whether a garnishee order nisi should be made absolute if a foreign bankruptcy order is made after the service of the garnishee order nisi.

Background

Sit Kwong Lam v Petrolimex Singapore Pte. Ltd [2019] HKCA 1220 (date of judgment 1 November 2019)

But Ka Chon v Interactive Brokers LLC [2019] 5 HKC 238 (date of judgment 2 August 2019)

The Companies Court has changed the approach in which winding up proceedings are handled when the alleged debt is the subject of an arbitration agreement in the case of Lasmos Limited v Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426. In two recent bankruptcy cases, the Court of Appeal made obiter comments on the Lasmos approach.