With more than three lakh confirmed cases and 14 thousand deaths across 190 countries, the Coronavirus disease (COVID-19) pandemic has caused (and continues to cause) unprecedented disruptions in the global political, social and economic environment. India has not remained untouched from this. With almost 500 confirmed cases and the country in lock-down mode to prevent further outbreak, social and economic activities have come to a grinding halt.
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.
The World Health Organisation (WHO) declared COVID-19 as a “pandemic” on March 11, 2020.
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.
Introduction
The Supreme Court in Pioneer Urban Land and Infrastructure Limited vs. Union of India (Pioneer Judgment)[1], has upheld the constitutionality of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018 (Amendment Act)[2].
The Insolvency and Bankruptcy Code, 2016 (IBC) has been widely considered a landmark legislation that has brought about a paradigm shift in the recovery and resolution process.
However, during the implementation of the IBC over the past two years and eight months, several challenges have emerged, including:
The 2005 Report of the Expert Committee on Company Law (JJ Irani Committee Report) had noted that an effective insolvency law:
“should strike a balance between rehabilitation and liquidation. It should provide an opportunity for genuine effort to explore restructuring/ rehabilitation of potentially viable businesses with consensus of stakeholders reasonably arrived at. Where revival / rehabilitation is demonstrated as not being feasible, winding up should be resorted to.
The Reserve Bank of India (“RBI”) has issued the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (“New Framework”) on June 07, 2019[1] in which the RBI has continued the core principles of its circular dated February 12, 2018 (“February 12 Circular”) and has added provisions encouraging both informal and formal restructuring in India.
The U.S. Supreme Court decided yesterday to uphold a licensee’s right to continue using trademarks despite the bankrupt licensor’s rejection of the underlying license agreement. As a result, bankrupt brand owners cannot use bankruptcy law to unilaterally revoke a trademark license. In Mission Product Holdings, Inc. v.