WHAT DUTY?

WHAT DOES IT MEAN?

WHEN DOES IT APPLY?

Maintenance of solvency Management of business risks

Gerade in aktuellen Krisenzeiten stellt sich für viele Unternehmer die Frage, wie sie ihr Unternehmen bestmöglich sanieren können, um so das Fortbestehen des Unternehmens zu sichern. Dafür stehen in der Praxis eine Vielzahl an rechtlichen Sanierungsinstrumenten zur Verfügung.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, qualifying businesses may seek up to $10 million under the Paycheck Protection Program (PPP) for funding payroll and business expenses. The US Small Business Administration (SBA) guarantees the loans, and the full principal amount of the loans and any accrued interest may qualify for loan forgiveness. For many businesses, PPP loans have served as a lifeline during the COVID-19 pandemic.

The coronavirus pandemic has made life complicated for almost all businesses, especially from the financial point of view. Businesses thus face an increased risk of bankruptcy and subsequent insolvency proceedings.

To help with this challenging situation, an amendment to the Insolvency Act as part of the "Lex Covid" was adopted. Lex Covid became effective on 24 April 2020.

Initiation of insolvency proceedings

Creditor's right to file an insolvency petition

Introduction

On 23 April 2020 the Croatian Government adopted a Proposal for an Act on Intervention Measures in Enforcement and Insolvency Proceedings During Special Circumstances (the "Draft Intervention Act"). The Draft Intervention Act states that its purpose is to alleviate the position of citizens subject to the enforcement proceedings, to help companies which may be facing bankruptcy during the special circumstances, as well as to help the recipients of national and/or EU grants and recipients of the governmental aid due during the special circumstances.

With the fourth law on COVID-19, the Austrian legislator has suspended the obligation of an overindebted debtor to file for insolvency until 30 June 2020, irrespective of the cause of the over-indebtedness. Some other countries in the CEE region have also adopted measures to combat the consequences of COVID-19 as detailed in the following overview:

Die COVID-19-Pandemie und deren wirtschaftliche Auswirkungen führten bisher zu insgesamt fünf umfassenden COVID-19 Gesetzespaketen. Darunter finden sich ua Änderungen im Insolvenz-, Anfechtungs- und Eigenkapitalersatzrecht, mit denen die wirtschaftlichen Auswirkungen der COVID-19-Pandemie adressiert werden sollen. Ein erster Schritt in die richtige Richtung, weitere insolvenzrechtliche Anpassungen werden aber folgen müssen. Im Folgenden wird ein Überblick über die wesentlichen insolvenzrechtlichen Änderungen gegeben.

Verlängerte Insolvenzantragsfrist

Bulgaria has been in a state of emergency since 13 March due to the COVID-19 outbreak. On 23 March the Parliament voted on a special State of Emergency Act (COVID-19 Act) which suspended all court, arbitration and enforcement terms and proceedings during the state of emergency, currently in force until 13 April.

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act.”The legislation includes a historic $2 trillion aid package intended to stabilize the U.S. economy and provide disaster relief aid to American citizens and businesses impacted by the COVID-19 pandemic. The emergency aid package, which is by far the largest in American history, contains many provisions focused on providing relief. Among these are certain temporary amendments to Title 11 of the United States Code (the “Bankruptcy Code”).

On 14 March 2020, the Croatian Ministry of Justice issued recommendations to prevent the transmission of the novel coronavirus (COVID-19) and control the pandemic ("Measures"). The Measures are applicable until 1 April 2020. The Measures advise temporary adjustments to legal requirements in civil, insolvency and criminal procedure law to avoid hardship that would otherwise arise as a result of the coronavirus crisis.

With the aim of further mitigating the negative effects of the crisis on companies and private individuals, the Measures advise the following: