Talking Point: Insolvency risk in the construction industry November 2020 In the difficult market conditions which have accompanied the COVID-19 pandemic, the financial health of many industries has been adversely affected. The construction industry is no exception and the insolvency of a party to a construction contract would lead to a number of challenges from both the contractor and the employer’s perspectives. We discuss some key considerations and potential steps that could be taken by the employer and contractor where an insolvency event (e.g.

Teilweise Erleichterung für Geschäftsleiter – Haftungsgefahren für Zahlungen bei Insolvenzreife gegenüber der aktuellen BGH-Rechtsprechung vermindert

Germany's new restructuring regime is expected to come into force 0n 1 January 2021. At the heart of the new regulation is the introduction of a so-called stabilization and restructuring framework (“SRF”) for companies. In a sea change to the traditional approach, the SRF enables a company to be restructured before insolvency proceedings have to be initiated. It is therefore expected that this new regime will have a major impact on German restructuring practice.

Introduction of a Preventive Restructuring Framework

New legislation has come into effect which extends the applicability of certain temporary provisions under the Corporate Insolvency and Governance Act 2020 (“CIGA”). But what does this mean for businesses?

In several ways, businesses can continue to make use of the breathing space provisions brought in by CIGA to support their day-to-day work in keeping their companies afloat during the pandemic.

Deutschland erhält ein neues Restrukturierungsrecht, und zwar voraussichtlich ab 1. Januar 2021. Herzstück der im aktuellen Gesetzesentwurf vorgesehenen Neuregelungen ist die Schaffung des sogenannten Stabilisierungs- und Restrukturierungsrahmens („SRR“) für Unternehmen. Der SRR soll die Restrukturierung eines Unternehmens ermöglichen, bevor ein Insolvenzverfahren eingeleitet werden muss. Die Gesetzesänderung wird daher einen großen Einfluss auf die Restrukturierungspraxis haben.

On 8 October 2020, the Insolvency Service published the outcome of its review of industry reforms to pre-pack sales in administration and made recommendations which will impact the way in which pre-pack sales to connected parties in particular operate in the UK in the future.

Speed read

Auswirkungen für Vermieter und Verpächter

In 2015, responding to mounting concerns about pre-pack administration sales, a set of voluntary industry measures were introduced to address the perceived lack of transparency and trust in the process – especially when the sale was to a connected party, like a director or shareholder of the company in administration.

The Judge in the Sunbird scheme of arrangement sanction hearing has declined to sanction the scheme due to the “paucity of information” provided by the company to the creditors ahead of the creditor vote.

The Judge criticised the company’s general approach to the way in which it engaged with creditors, particularly those whom the directors felt would be obstructive to the scheme’s progress. In general terms, the Judge commented on the practice of lock-up agreements and highlighted concerns with the payment of lock-up fees.

In a pair of recent contrasting judgments, Re Agritrade Resources Ltd [2020] HKCFI 1967 and Re Rare Earth Magnesium Technology Group Holdings Ltd [2020] HKCFI 2260, the Hong Kong Court has once again confirmed its pragmatic approach towards applications by foreign liquidators and provisional liquidators for recognition and assistance in Hong Kong. The judgments emphasize the importance of adhering to the standard forms of order adopted by the Hong Kong courts in respect of such applications, and the need for any departure from the standard form to be fully justified.