Lockdown, shutdowns, drops in revenue and related negative impacts of the COVID-19 pandemic faced by companies even still operating and in a healthy state have prompted the Czech government to respond to this situation and implement statutory measures to mitigate such impacts (the so-called LEX COVID), also in the area of insolvency. Most of such measures are only temporary during the extraordinary measures taken by public authorities during the COVID-19 pandemic. LEX COVID, which brings the below-mentioned changes, has already been enacted and came into force on 24 April 2020.

As a director or manager of a UAE company, you will know that like individuals, companies experience times of good health and occasional periods of sickness.

In this note, we focus on you, as directors (which includes managers) of “onshore” limited liability companies (“LLCs”), noting of course that the rules may also apply to certain free zone entities as well. We want you as directors to be certain of your duties and responsibilities in the good times but also sure of the actions you should or could take if things go wrong for your company, and financial difficulties arise.

Prepackaged bankruptcies, prearranged bankruptcies, and expedited sales are available options for businesses in need of accelerated restructurings during the coronavirus (COVID-19) pandemic.

While the full extent of COVID-19’s impact on the economy remains to be seen, it will likely create significant restructuring activity for companies already experiencing financial distress and otherwise healthy companies that experience distress caused by the pandemic. We have already seen an increase in Chapter 11 filings, and more will follow.

A number of UK insolvency trade association bodies and professionals are advocating for the use of what is known as a light-touch administration for companies in financial distress as a result of the coronavirus (COVID-19) pandemic.

Light Touch Administration – What Is It?

Als Teil des gesetzgeberischen Maßnahmenpakets zur Abmilderung der wirtschaftlichen Auswirkungen der COVID-19-Pandemie erleichtert das COVID-19-Insolvenzaussetzungsgesetz (COVInsAG) die rechtssichere Finanzierung kriselnder Unternehmen und setzt Anreize an deren Gesellschafterkreise: der Nachrang von Gesellschafterdarlehen und das Erfordernis eines Sanierungsgutachtens sind durch das COVInsAG suspendiert.

In the past few years, many automotive suppliers have been facing increasing financial or operational problems. The COVID-19 pandemic has exacerbated these problems and is putting some of these companies in considerable distress. The search for possible solutions is in full swing, and for financial investors or competitors with strong liquidity, there is the opportunity to acquire shares in the companies in crisis or alternatively in individual assets at comparatively favourable conditions.

In response to the coronavirus (COVID-19) pandemic, US bankruptcy courts have granted extraordinary equitable relief in some cases. As government orders enforcing stay-at-home measures have forced many businesses to shutter indefinitely, bankruptcy courts have implemented procedures to allow the ongoing—albeit virtual—administration of bankruptcy cases.

A Roll of the Dice: Mothballing Bankruptcy Cases Under 11 USC § 305(a)

On 23 March 2020, the Australian Parliament passed the Coronavirus Economic Response Package Omnibus Act No. 22 of 2020 (the Act), which is designed to provide an economic response to the effect, on Australia, of the coronavirus pandemic sweeping the world by stimulating and supporting economic activity.

In relation to the Australian insolvency regime the Act made some significant changes to the relevant laws as follows.

Temporary relief for financially distressed individuals and businesses

Following the declaration of the state of alarm in Spain due to the COVID-19 outbreak on March 14 2020, the Spanish Government announced the implementation of a series of extraordinary measures in the financial sector in order to address the economic impact promoted by the rapid spread of COVID-19.

Temporary suspension of obligation to file for insolvency and of creditor’s right to request opening of insolvency proceedings

On 25 March 2020 the German parliament passed a bill “to mitigate the consequences of the COVID-19 pandemic in civil, bankruptcy and criminal procedure law” (COVID-19 Bill) that aims at protecting companies that experience financial difficulties as a result of the COVID-19 pandemic.