A winding-up petition is one of the most critical pieces in a creditor’s armoury where a debt remains unpaid. However, in these challenging times, the government clearly wants to provide a temporary shield to companies who are unable to pay their debts due to COVID-19.

While those in the restructuring and insolvency profession have been attempting to predict what the temporary suspension of the wrongful trading provisions proposed by the government might look like, the Corporate Insolvency & Governance Bill (the “Bill”) is not quite as anticipated.

The current market environment, created by the global COVID-19 pandemic, has few parallels. During periods of economic uncertainty, many issuers and borrowers face significant and difficult issues in managing their capital structure. The purpose of this guide is to provide issuers and borrowers with practical guidance to proactively manage these issues and control their capital structure. In particular, this guide:

On May 20, 2020, the UK Government published its much anticipated draft legislation (the Corporate Governance and Insolvency Bill) which aims to provide greater opportunities for company survival and better returns for creditors during and after the COVID-19 emergency. The Government intends to ask Parliament to expedite progress of the Bill.

As discussed in an earlier Legal Update,¹ substantial uncertainty exists over whether companies in bankruptcy are eligible for loans under the Paycheck Protection Program, or PPP, which was established by the CARES Act to support small businesses by offering SBA-guaranteed loans on advantageous terms. Several recent bankruptcy court decisions underscore this uncertainty.

I. Introduction

Due to the current corona crisis and the therewith associated tense economic situation, many managing directors (Geschäftsführer) are faced with the question of a possible, punitive obligation to file for insolvency as well as other duties that must be observed in the context of a crisis.

The following provides an overview of the obligation to file for insolvency, payment prohibitions in a crisis as well as the facilitations introduced under the German COVID-19 legislation.

Status Of Crypto-Assets Under English Law

The definition of ‘property’ in section 436 of the Insolvency Act 1986 is considered by many to be wide enough to be inclusive of crypto-assets, and recent developments in this jurisdiction also support the position that crypto-assets constitute property under English law.

A variety of steps have been taken to accommodate managers working during the lockdown. As at 20 April 2020, these measures are as follows:

1. More flexibility for the governance of funds

The increased flexibility for the governance of funds during lockdown orders enacted under the emergency legislation of 20 March 2020 can be found here.

In this client alert we outline the practical approach taken in Luxembourg for companies and unregulated investment funds facing liquidity issues resulting from government lockdowns in response to the COVID-19 outbreak.

A court¹ has approached the interplay between the Insolvency Act 1986 and the Government's furlough scheme so as to encourage and support the rescue culture and facilitate access to the scheme by administrators. It ruled that: