With the possibility of a no-deal Brexit looming large, the implications for Irish insolvency practitioners is something we will all have to consider. The insolvency landscape will most likely look very different when we all return to the office after Christmas. This is a discussion on some of the possible implications for Irish and UK insolvency practitioners post-Brexit.

Current Regime

The Data Protection Commission ("the DPC") has issued useful guidelines for receivers in the context of data protection.

Once a receiver is appointed, they will have access to borrowers' personal data such as the address of the property put into receivership and certain details concerning the borrowers.

The main points of the DPC's guidance are as follows:

We will soon enter a phase of the Covid19 era when more and more companies will be forced to apply for protection from their creditors under the Examinership provisions of the Companies Act, 2014. Security as always will be a key consideration for the stakeholders in this restructuring process. Fixed and floating charges are almost always well protected but what about personal or corporate guarantees?

The legislation

The legislation is very specific regarding guarantees.

The High Court appointed an examiner to three connected companies involved in the food distribution industry on 27 March 2020 in what was effectively the first examinership of the Covid-19 pandemic period.  Fieldfisher acted on behalf of Wert Capital Ltd which was the parent company for a number of food distribution entities in a successful application for court protection for the Group from their creditors.

The impact of COVID-19 is being felt at all levels of the economy and will work its way through bankruptcy courts for years to come. In these early days, many creditors who are themselves suffering are providing assistance to troubled companies. Suppliers and commercial landlords are agreeing to various forms of relief, including modified credit terms and rent relief to allow customers to bridge this period of unprecedented disruption. While these corporate good Samaritans are providing immediate aid they may be subjecting themselves to the risk of future losses.

The economic fallout from the COVID-19 pandemic will leave in its wake a significant increase in commercial chapter 11 filings. Many of these cases will feature extensive litigation involving breach of contract claims, business interruption insurance disputes, and common law causes of action based on novel interpretations of long-standing legal doctrines such as force majeure.

Last week, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, implementing broad relief for individuals and businesses affected by COVID-19. One of the sections of the CARES Act receiving less attention is a temporary amendment to the Bankruptcy Code to provide streamlined reorganization procedures for businesses with debt of less than $7.5 million.

As the nation hunkers down to combat the novel coronavirus (COVID-19), bankruptcy courts throughout the country have moved quickly to implement procedures to preserve access to the courts while limiting in-person interaction during the crisis. Each court’s specific COVID-19 procedures are different, but they largely prohibit in-person hearings, recognize the need for flexibility and adjournments for non-emergent matters whenever possible, and encourage the creative use of technology to allow as many matters to go forward as scheduled, including evidentiary hearings.

Social distancing. Elbow bumps. Flatten the curve. These are the new phrases and behaviors we have learned to avoid exposure to the novel coronavirus (COVID-19). This epic struggle forces us to reexamine and reevaluate our daily habits, lifestyles and customs as we work collectively to minimize the harm to our families, friends and neighbors throughout the United States.

A Members’ Voluntary Liquidation (“MVL”) is an efficient way to wind up a solvent company and release value to members. It is most often used where the directors wish to retire, the company has realised its potential or the company is dormant. By properly winding up the Company, the danger of the company being involuntarily struck off the Register of Companies and any resulting liability for the Directors is removed. A summary of the process is as follows: