The uncertainty surrounding the COVID-19 pandemic has rocked the global economy, and companies of all types and sizes are feeling the impacts. In recent weeks, certain high-profile retailers filed for Chapter 11 bankruptcy protection. Some airlines are expected to enter bankruptcy as well, and even farmers are feeling the pinch. Overall, data suggest that bankruptcies will increase almost 25 percent from last year.
The Corporate Insolvency and Governance Bill 2019-21 introduced to the UK parliament on 20 May contains provisions designed to give companies greater administrative flexibility during the COVID-19 pandemic, including how and when they are required to hold their AGMs and other general meetings and when key Companies House filings have to be made, such as annual accounts, confirmation statements and other forms, as well as the registration of charges.
In brief
The Department for Business, Energy and Industrial Strategy published the Corporate Insolvency and Governance Bill yesterday (20 May 2020). The Bill, when enacted, represents the most significant amendment to the UK’s insolvency laws since the Enterprise Act 2002 introduced the administration regime.
We know that landlords have been waiting to find out how they can legitimately pursue arrears from their tenants. It’s been a long wait for the publication of the Corporate Insolvency and Governance Bill.
Insofar as commercial property rent claims are concerned, the crucial points are:
Zenrock Commodities Trading Pte Ltd is one of the latest additions to the increasing list of commodities traders in Singapore making recent headlines, with financial difficulties and malpractice allegations coming to light. The COVID-19 crisis, oil price volatility and slumping demand are acting as a catalyst, and are affecting a majority of oil majors and traders in Singapore and the region.
Can you take security over all types of assets, including working capital? Generally yes, before filing for the reorganization or the ruling setting forth the start of the liquidation bankruptcy. After the beginning of the reorganization proceedings, no further security interests can be granted over the assets of the debtor for credits due before the beginning of the reorganization proceedings. The debtor can grant security interests for new creditors after the start of the reorganization proceedings.
J.C. Penney filed chapter 11 the evening of Friday, May 15, 2020. Hearings on the case were commenced on the next day - a Saturday. Several lawyers on the call suggested to the court that it was the first time they had ever appeared on a weekend. Hundreds of people participated in the hearing. And, in fact, one of the participants was an individual small shareholder of the company.
Where was this hearing? The answer is everywhere and nowhere at the same time. Each participant appeared remotely. Exhibits were posted for everyone to review online at join.me.
Directors of Australian companies face significant personal monetary -- and potential criminal and adverse professional -- consequences if they allow the company to trade whilst insolvent.
Australian insolvent trading laws are harsher, and more frequently utilised to prosecute directors personally, than in many other jurisdictions including in the US and the UK.
Accordingly, frequent assessment of a company's solvency by its directors is crucial, particularly in financially difficult times, as are active steps to address any potential insolvency.
Introduction
The concept of winding up does not exclusively apply to insolvent companies. Solvent companies can also be wound up, on the initiation of the company’s directors and shareholders (for example, as part of a corporate reconstruction or to close down non-operating or redundant entities).
An overview of the two key procedures to effect the dissolution of a solvent Australian company, being Members’ Voluntary Liquidation and Deregistration, is set out below.