In our April newsletter, we noted that the UK Government had announced proposed changes to insolvency laws.  On 20 May 2020, the Corporate Insolvency and Governance Bill (UK) was introduced.  The proposed reforms include:

The Government has passed an omnibus bill which introduced amendments that will assist New Zealand to respond to the wide-ranging effects of COVID-19.

In brief the changes to insolvency legislation are:

In Re A Company (injunction to restrain presentation of petition) [2020] EWHC 1406 (Ch), the Court held that it is able to take into account the likelihood of a change in the relevant law in deciding whether to restrain a winding up application from being brought.

The English Court of Appeal in Re Debenhams Retail Ltd [2020] EWCA Civ 600 recently considered the inter-relationship between the UK Government’s Coronavirus Job Retention Scheme and the ‘adoption’ of employment contacts by administrators under the Insolvency Act 1986.  The issue was whether by paying only the amounts which may be claimed under the Scheme to furloughed employees, the administrators have adopted the contracts.  Adoption means that the wages and other entitlements are payable as expenses of the administration ahead of other expenses.  

The Federal Court of Australia in Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 472 has made orders to release the administrators of retailer The Colette Group (the Group) from personal liability for rent for a two-week period during the COVID-19 pandemic. 

The Federal Court of Australia in Frisken, in the matter of Avant Garde Investments Pty Ltd v Cheema [2020] FCA 98 has considered a dispute between a receiver and the director of the company as to whether the provisional liquidator, Mr Banerjee, should be appointed as the liquidator. 

The director sought the appointment of different liquidators on the basis that Mr Banerjee’s conduct as provisional liquidator was such that a reasonable person might apprehend that he might not be impartial as liquidator. 

Amendments to Article 9.1 of the Insolvency Law¹ ("Law 149-FZ") came into effect on 24 April 2020. The amendments provide that the benefit of the insolvency filing moratorium can be waived (the "moratorium waiver"). In addition, on 21 April 2020, the Supreme Court of the Russian Federation ("Russian SC") adopted clarifications (the "Clarifications"),² which, in particular, explain that the moratorium will apply if the debtor meets the formal criterion of being included in the list of persons covered by the moratorium ("protected debtors").

The Government has published the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill), an omnibus bill containing amendments (both temporary and permanent) to several acts. These amendments aim to both assist organisations in effectively managing the “immediate impacts of the response to COVID-19”, as well as mitigating some of the pandemic’s “unnecessary and potentially longer-term impacts on society”.

The Spanish Government has just approved relevant changes to the Spanish Insolvency Act in view of the current situation in Spain pursuant to the COVID-19 outbreak.

The new Royal Decree 16/2020, of 28 April

Before Royal Decree 16/2020, of 28 April ("RD 16/2020"), was approved, certain temporary changes had already been introduced as a matter of urgency to Spanish Act 22/2003, of 9 July (the "Spanish Insolvency Act"), by Royal Decree 8/2020, of 17 March ("RD 8/2020").

The effects of the COVID-19 outbreak leave many Belgian enterprises in financial distress, or even, for some of them, at risk of insolvency. In order to help these enterprises navigate the crisis and prevent them from going bankrupt, the Belgian Government implemented a moratorium on insolvency and enforcement proceedings.

Beneficiaries

Any enterprise (e.g. any legal person) whose continuity is threatened due to the COVID-19 outbreak and which was not in cessation of payments on 18 March 2020 may benefit from this moratorium.