Potentially casting retail landlords against their debtor-tenants, a bankruptcy judge in the Eastern District of Virginia--an increasingly popular destination for major retail bankruptcy filings--allowed Pier 1 and its affiliates to effectively "shelter in place" while the majority of its stores remain closed across the country.
The news of major retailers, gyms and others filing or expecting to file for bankruptcy protection is yet another unfortunate reality of the COVID-19 pandemic crisis. A corporate bankruptcy can lead to a host of insurance-related issues, including claims made against directors and officers, competition for finite insurance limits, and disputes over who has rights or priority to, and can access, insurance policy proceeds.
The U.K. Government intends to exempt financial services firms from certain provisions of the new U.K. Corporate Governance and Insolvency Bill. The Bill, announced on March 28, 2020, will amend aspects of the U.K. insolvency regime (as set out under the Insolvency Act 1986) in light of the financial difficulties faced by many businesses as a result of the COVID-19 pandemic. The Bill also includes provisions for companies’ annual general meetings and filing requirements during the COVID-19 crisis.
The Bill’s insolvency-related measures include:
May 2020
How Debtors in Saudi Arabia Can Manage Insolvency Risk Post-Covid-19
IN THIS ISSUE:
Introduction
Who Is Subject to The Bankruptcy Law?
When is a Person "Insolvent" in The Kingdom?
What Are The Options Available to an Insolvent Entity?
Directors' Duties
Can't a Distressed Debtor Just Wind Itself Up Voluntarily?
Statutory Obligations When a Company Becomes or Approaches Insolvency
Role of the Bankruptcy Commission
Role of Bankruptcy Officers
Options When a Company Is Insolvent
GOVERNANCE & SECURITIES LAW FOCUS
Proxima Nova A ExCn 35pt
MAY 2020/LATIN AMERICA
Below is a summary of the main developments in US, EU, and UK corporate governance and securities law since our last update in February 2020.
Financial regulatory developments are available here.
IN THIS ISSUE
In the light of increased volatility across many markets and disruptions to economic activity, parties to transactions that are subject to ISDA Master Agreements1 will need to think about what strategies they would adopt if an Event of Default occurs with respect to their counterparties.
Choices
This note sets out the circumstances in which a creditor may successfully lift a statutory moratorium against a company in administration in England and Wales, and in Singapore.
English law
United Cannabis Corp. entered into chapter 11 several days ago in an effort to stop various patent infringement claims being lodged against it. Most bankruptcy courts have said that use of the federal bankruptcy laws by companies in the cannabis space is a no go because even if the companies are in compliance with applicable state laws, they are operating in violation of federal law. United Cannabis Corp. mostly deals in hemp based products, the production and sale of which do not violate the Controlled Substances Act.
The outbreak of the novel coronavirus pandemic (COVID-19 or Coronavirus) has had and will continue to have wide-ranging implications for businesses, governments and institutions across markets and industries. Shearman & Sterling (Shearman) has created a dedicated resource hub containing information on the potential impact this pandemic may have on businesses, and what businesses can do to prepare and succeed in this rapidly evolving space going forward. The sections that follow cover select key topics that may be of particular interest at the time of writing.
Background
The COVID-19 pandemic has led certain infrastructure businesses to face significant disruptions to operations and revenues, giving rise in many instances to breaches or potential breaches of finance documentation. This article considers at high-level issues to be mindful of when undertaking waiver processes to address such breaches.
Potential Waivers
Financial Covenants