This article was originally published in Law360. 

The Corporate Insolvency and Governance Act (the “Act”) received Royal Assent on 25 June 2020 and is now in force. As anticipated in our client alert of 26 May 2020, the Act represents the most extensive changes in the insolvency landscape since the Enterprise Act came into force in 2003.

The provisions of the Act contain both:

During this time of economic upheaval amidst the COVID-19 pandemic, many corporate borrowers are faced with the inability to service debt obligations, and creditors may seek to hold corporate officers and directors accountable as a result. In these uncertain times, it is wise to review the fiduciary duties of corporate directors and officers and the effects of financial distress on such duties.[1] The following Q&A provides guidance on this issue from a Delaware law perspective, as Delaware is the most commonly cited jurisdiction for corporate governance.

For months, landlords and tenants impacted by the COVID-19 pandemic have wondered whether force majeure clauses in leases would excuse a tenant's non-payment of rent. On June 3, 2020, a Bankruptcy Court for the Northern District of Illinois offered us an early look into how courts might interpret such clauses in the midst of the current crisis. In In re Hitz Restaurant Group, No. 20-B05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 3, 2020), the Bankruptcy Court ruled that Executive Order 2020-7, the Stay-at-Home Order (the "Order") enacted by Illinois Governor, J.B.

The impact of COVID-19 is yet to be fully realized, and many companies are yet to consider restructuring as a means to survive the pandemic, but all companies and all creditors can benefit now from learning how employee matters are treated in a bankruptcy proceeding under chapter 11 of the U.S. Bankruptcy Code (as amended, the Bankruptcy Code). This blog provides a high-level overview of some of the most material matters affecting an employee workforce in the context of a chapter 11 restructuring.

The Corporate Insolvency and Governance Bill (the “Bill”) was laid before Parliament on 20 May 2020 and represents the most extensive changes in the insolvency landscape since the Enterprise Act came into force in 2003. Many of the proposals were originally consulted on in 2016, but were not progressed in light of Brexit until the COVID-19 crisis led to an urgent need for rapid and responsive reforms. The Bill is expected to come into force in June at the earliest.

The provisions of the Bill contain both:

Recent weeks have witnessed seismic shifts in the oil and gas industry because of crashing oil prices, demand destruction associated with the COVID-19 pandemic, and crude oil storage reaching record capacity levels. Upstream producers are especially vulnerable to these market pressures and have begun shutting in wells, asserting force majeure, and cutting costs. As counterparties to distressed producers, midstream players face new challenges in navigating contractual relationships and mitigating risk.

As the impact of COVID-19 is felt across the globe, many airlines have grounded their fleet, ceased operating flights, and are potentially in breach of any financial covenants that they may have in their debt or lease documents, if not already in technical insolvency.

If an airline does go into insolvency, what should banks and lessors do to protect their assets? What issues, practical and legal, should they be aware of?

The Warning Signs

As American individuals, employers, and governments are implementing various restrictions from social distancing to quarantines to reduce the rate of new COVID-19 infections, each of these decisions results in an increasingly negative impact on the American economy. Even with the recent financial aid package passed by Congress, with greater credit constraints and a heightened sensitivity to weak consumer demand, small businesses are among those hit the hardest by COVID-19 restrictions.

2019 was a momentous year for the energy sector: The U.S. became a net oil exporter for the first time in recorded history and at the same time energy dropped to less than five percent of the S&P 500 Index. With the precipitous drop in commodity prices and macroeconomic volatility triggered by the oil price war and COVID-19 pandemic, 2020 presents challenges and change for the global and domestic energy sectors. We thank all of our valued clients and look forward to working with you to anticipate and solve problems and capitalize on industry and global trends.