The new Corporate Insolvency and Governance Bill will introduce new provisions to protect a company from suppliers wishing to terminate supply contracts or invoking more draconian terms when the company is entering into certain insolvency procedures, a CVA, or a new restructuring plan or moratorium (as introduced by the Bill), (each an “Insolvency Procedure”).
The purpose behind the new provisions is to maximise the possibility of a company being rescued or being able to sell its business as a going concern by helping it to trade through an Insolvency Procedure.
On 28 May 2020, the Hungarian Government adopted amendments to the laws on company liquidation and forced deletion procedures to cushion the impact of the global coronavirus pandemic on the economy.
1. Changes related to liquidation
Liquidation is initiated when a company is unable to meet its financial obligations and pay off its debt. However, in Hungary, the courts do not apply an actual insolvency test before ordering liquidation but check only whether certain criteria have been met.
Status as of 16/09
Table of Content
The landlord argued that the force majeure clause did not apply at all for three primary reasons. The Bankruptcy Court rejected each of the landlord’s arguments.
Last week the UK government introduced the Corporate Insolvency and Governance Bill in Parliament.
The main objective of the Bill is to provide businesses with the flexibility and space needed to continue to trade during this difficult time caused by the COVID-19 pandemic. That said, the provisions around the new moratorium and the new restructuring plan proposal have been under consideration for a few years.
The Bill’s measures can be split into three categories:
WHAT DUTY?
WHAT DOES IT MEAN?
WHEN DOES IT APPLY?
Maintenance of solvency Management of business risks
In In re Palladino, 942 F.3d 55 (1st Cir. 2019), the U.S. Court of Appeals for the First Circuit addressed whether a debtor receives “reasonably equivalent value” in exchange for paying his adult child’s college tuition. The Palladino court answered this question in the negative, thereby contributing to the growing circuit split regarding the avoidability of debtors’ college tuition payments for their adult children as constructively fraudulent transfers.
Background
Wrongful Trading
On 14 May 2020, the UK Government extended the temporary suspension of wrongful trading liability until 30 June 2020.
Gerade in aktuellen Krisenzeiten stellt sich für viele Unternehmer die Frage, wie sie ihr Unternehmen bestmöglich sanieren können, um so das Fortbestehen des Unternehmens zu sichern. Dafür stehen in der Praxis eine Vielzahl an rechtlichen Sanierungsinstrumenten zur Verfügung.
The coronavirus pandemic has made life complicated for almost all businesses, especially from the financial point of view. Businesses thus face an increased risk of bankruptcy and subsequent insolvency proceedings.
To help with this challenging situation, an amendment to the Insolvency Act as part of the "Lex Covid" was adopted. Lex Covid became effective on 24 April 2020.
Initiation of insolvency proceedings
Creditor's right to file an insolvency petition