Temporary suspension of obligation to file for insolvency and of creditor’s right to request opening of insolvency proceedings

On 25 March 2020 the German parliament passed a bill “to mitigate the consequences of the COVID-19 pandemic in civil, bankruptcy and criminal procedure law” (COVID-19 Bill) that aims at protecting companies that experience financial difficulties as a result of the COVID-19 pandemic.

About a year ago, I completed the most exhausting marathon of my life serving as the chief lawyer during the cross-border restructuring and chapter 11 of Waypoint Leasing, an Ireland-based helicopter leasing company. I joined Waypoint Leasing shortly after it started operations in the newly formed helicopter leasing industry. After the first few years of meteoric growth, the collapse in oil & gas prices hit the helicopter industry hard. We soon found ourselves dealing with bankrupt customers and eventually reached the brink of financial distress ourselves.

Vorübergehende Aussetzung der Insolvenzantragspflicht und des Rechts des Gläubigers, die Eröffnung eines Insolvenzverfahrens zu beantragen

Am 25. März 2020 hat der Deutsche Bundestag ein Gesetz „zur Abmilderung der Folgen der COVID-19-Pandemie im Zivil-, Insolvenz- und Strafverfahrensrecht (COVID-19 Insolvenzgesetz) beschlossen, das darauf abzielt, Unternehmen zu schützen, die infolge der COVID-19-Pandemie in finanzielle Schwierigkeiten geraten.

The Czech Government has prepared several measures that should help people and businesses in the challenging times related to the outbreak of COVID-19. These measures are currently divided into several draft laws, covering topics such as insolvency, loans, leases, employment, and court proceedings. We have chosen relevant fields briefly described below and we will provide more detailed information about these relevant fields once the final laws are passed by the Parliament (which should be shortly due to the state of legislative emergency).

The Indonesian Supreme Court has provided guidance on the availability of the key restructuring process in Indonesia – the examination process of a suspension of payment or restructuring (Penundaan Kewajiban Pembayaran Utang or PKPU). The guidance comes amidst a challenging economic climate and limits the remedies available to secured creditors by preventing secured creditors from initiating a PKPU.

PKPU as a Restructuring Channel

Bankruptcy can provide important advantages to companies considering M&A activity today. M&A purchases of bankrupt companies obviously often feature significantly depressed valuations and a small universe of potentially viable purchasers.

M&A activity that is part of the bankruptcy process will prioritize speed and efficiency, offering a number of potentially important benefits over the traditional merger process, including:

Analysts expect that GDP will plummet as a consequence of the restrictions on economic activities imposed as a consequence of the COVID-19 pandemic, and that the global economy, and with it the Czech economy, will slow down considerably. Various entities from across numerous industries are facing, or may soon face, an immediate liquidity shortfall.

Directors have a duty to act in the best interests of the company. A director has the following general duties under the Companies Act 2006:

It is widely known that COVID-19 imposes immediate difficulties on many companies to pay their bills, and – equally – to collect their own outstanding invoices. Below, we discuss the most commonly expected complications against the background of enforcement, leniency provisions and – if worst comes to worst – insolvency in the Netherlands.

Government measures (emergency aid)

The economic shock and disruption caused by the outbreak of the SARS-CoV-2-Virus (COVID-19-pandemic) resulted in unprecedented circumstances for companies and prompted recent emergency rescue measures by the German legislator. In the following, we are highlighting two major legislative measures that will come into force in the next few days.

Legislative changes to mitigate the consequences of the COVID-19-pandemic with respect to specific contract, corporate, insolvency and criminal law matters (the “COVInsAG”)