We have previously written about the effects of COVID-19 on the way we currently work, as well as how businesses need to adapt to protect their trade secrets, customer goodwill, and other interests. In ordinary times, emergency injunctive relief is often the first resort for a business after discovering its trade secrets were stolen or customer relationships are at risk.
Irish companies are facing challenges with the sudden changes imposed on their businesses as a result of the impact of COVID-19. Some may be experiencing cash flow difficulties; others may have had to temporarily cease trading altogether.
Directors are responsible for managing their company’s affairs. This requires them to identify and navigate risks, and to ensure that appropriate strategies and where necessary contingencies are in place to anticipate and deal with such risks.
On March 31, 2020, the Rhode Island Superior Court announced the creation of its COVID-19 Receivership Program. The Program establishes a unique non-liquidating receivership calendar intended to assist Rhode Island businesses that are unable to pay their debts as they become due as a result of the coronavirus pandemic. The Program is designed to give struggling businesses time to obtain emergency funding under the CARES Act or other source, to resume paying its ongoing obligations under Court supervision, and repay its prepetition debt.
During challenging economic times, Bankruptcy Courts serve an essential governmental and financial function. The COVID-19 outbreak has forced closures of businesses and governmental entities throughout the country, resulting in a cascade of financial distress across virtually every economic sector. The nation’s courts have not been immune from disruptions. Nearly all State Courts and Federal District Courts in major metropolitan areas have suspended non-emergency civil proceedings.
Seyfarth Synopsis: As OEMs confront the impact of the COVID-19 pandemic on an already changing automotive industry, one significant issue will be the inevitable financial challenges that many dealers will face. Financially distressed or, worse, bankrupt dealers, create serious issues for manufacturers and affiliated lenders, including negative publicity, dissatisfied customers, limited or shuttered operations, out-of-trust sales, and litigation.
COVID-19 is an unexpected shock for many businesses. Some businesses are being significantly affected, particularly those in the travel and hospitality sectors. We consider some of the options open to otherwise good businesses facing cash-flow and other financial issues as a result of COVID-19.
How are governments dealing with COVID-19
We consider one case illustrating the efficiency of international insolvency proceedings commenced in Ireland, improvements to the efficiency of the appellate courts and one imminent legislative change, which will impose an administrative burden on the holders of security over book debts.
Ireland as an efficient venue for international insolvency
You’ve been slugging it out with your opponent in state court for years. The end of that hard-fought battle is in sight. Maybe you even hold a judgment already and are taking steps to enforce it. Then, your adversary files bankruptcy, and everything grinds to a halt. You know the automatic stay that arises on account of the bankruptcy filing prohibits you from taking further actions to recover from the debtor outside of bankruptcy court.
The Personal Insolvency Act 2012 was enacted with the aim of throwing a lifeline to debtors, many of whom may be in arrears on mortgage loans secured against their principal private residence.
“To achieve great things, two things are needed: a plan, and not quite enough time.” – Leonard Bernstein
To paraphrase, great things happen when there is a plan and a deadline.
Examinership is one of Ireland’s key rescue processes for insolvent companies. It has been used successfully in very many cases since its introduction almost 20 years ago.
Crucially, it encompasses a deadline with no flexibility.
100 days