Introduction

The past decade has witnessed a significant increase in cross-border commerce involving Chinese companies. If these ventures fail, a common dilemma for our clients has been which jurisdiction they should focus their efforts on when enforcing their rights. As we explain below, the success of a cross-jurisdictional recovery claim can often depend on the important tactical decision of focusing on the correct jurisdiction(s) at the outset.

Identify all relevant jurisdictions

The new Corporate Insolvency and Governance Bill (the Bill) has been introduced into the UK Parliament and proposes significant changes to insolvency law, including:

As COVID-19 spread across the globe like wild fire, many of its effects—including an economic downturn and emerging disputes risks—are being felt across markets.

In March 2020, the UK government announced that changes will be made to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.

The legislation implementing this has now been laid before Parliament in the Corporate Insolvency and Governance Bill. This includes measures intended to tide companies through the COVID-19 pandemic, as well as far-reaching wholesale reforms to the UK’s restructuring toolbox.

On 26 May 2020, the Dutch Lower House adopted the long-awaited legislative proposal regarding the Dutch scheme (Wet Homologatie Onderhandsakkoord (WHOA)).

This is an important step towards the entry into force of the proposal. The Senate still needs to approve, but this can usually be done much quicker and less debate is expected.

The Senate will discuss the procedure of the treatment on 2 June 2020. Once the Senate has voted and it becomes clear when the WHOA comes into force, we will post a new update.

The Corporate Insolvency and Governance Bill has been introduced to Parliament. MPs will consider all stages of the Bill on 3 June 2020 and it will then progress to the House of Lords. The Bill is subject to the fast-track procedure as it aims to give companies flexibility and breathing space to continue trading in the COVID-19 crisis rather than entering into insolvency.

In addition to the crisis-related measures, there are three key areas of the Bill which will affect financial services companies and their arrangements with customers:

As the business world starts to count the cost of the COVID-19 pandemic and the government measures taken to contain it, attention is turning to the tools available to help companies that have been financially impacted.

Many companies are deferring payments to conserve liquidity, raising difficult questions around directors’ duties and leading to an immediate focus on how to protect the business from resulting creditor action.

The English Court of Appeal has handed down its judgment in the Debenhams case, on which we acted. A copy of the judgment can be downloaded here. This upholds the decision of the High Court, which followed the earlier decision in Carluccio’s.

Shortly after the passage of a bill injecting an additional $310 billion into the Small Business Administration’s Paycheck Protection Program, the SBA has issued another supplemental Interim Final Rule (IFR) providing new guidance on several issues, including eligibility for hedge funds, private equity firms and portfolio companies, and has also answered questions about businesses in bankruptcy proceedings.

This note sets out the duties of the following directors of French companies with a particular focus on the duties owed by such directors of companies in financial difficulties: