Despite the scale of the pandemic and resulting build-up of Covid related rent arrears, currently estimated at around £4.5bn, business restructuring has been relatively muted. This is partly explained by the moratorium on forfeiture and other restrictions on landlords’ remedies, combined with unprecedented government financial support for struggling businesses.

But rent arrears cannot be pushed down the track indefinitely. As restrictions are eased and focus turns to tackling this debt, business restructuring activity will no doubt intensify.

Earlier in the pandemic, our team identified the economic crisis caused by COVID-19 as a growth opportunity for businesses with the vision and the resources to take advantage. One such opportunity is the chance to diversify or grow by acquiring distressed competitors, suppliers, or customers.

On January 14, 2021, the U.S. Supreme Court decided City of Chicago, Illinois v. Fulton (Case No. 19-357, Jan. 14, 2021), a case which examined whether merely retaining estate property after a bankruptcy filing violates the automatic stay provided for by §362(a) of the Bankruptcy Code. The Court overruled the bankruptcy court and U.S. Court of Appeals for the Seventh Circuit in deciding that mere retention of property does not violate the automatic stay.

Case Background

On 1 January 2021, an Amendment to the Czech Act on Business Corporations came into effect, which introduced changes in the area of corporate governance. These include changes to the liability of statutory body members in case of corporate insolvency, and changes to the conditions for disqualification of statutory body members from the performance of their office or from serving as shadow directors.

Liability of statutory body members in the event of corporate insolvency

In response to the economic crisis caused by the COVID-19 pandemic, lawmakers very quickly started working on improving the legal framework to enhance existing and develop new restructuring instruments. Contrary to expectations, not that many restructurings actually took place in 2020, likely because of support made available to businesses.

The Hungarian National Bank (MNB) has issued its updated management circular for the treatment of outstanding loans affected by legislative moratoria.

In line with the European Banking Authority (EBA) position, the MNB states that it not necessary to automatically qualify a customer loan as being defaulted or restructured (and thus the creation of higher provisions is not necessary) if the loan fell under the Hungarian legislative moratoria for up to nine months prior to the expiry date of the second moratorium on 30 June 2021.

When an individual files a Chapter 7 bankruptcy case, the debtor’s non-exempt assets become property of the estate that is used to pay creditors. “Property of the estate” is a defined term under the Bankruptcy Code, so a disputed question in many cases is: What assets are, in fact, available to creditors?

Changes in Farm and Agriculture Bankruptcy

In 2019, the Small Business Reorganization Act (SBRA) and the Family Farmer Relief Act (FFRA) were passed to help American farmers who have seen an increase in financial difficulties. Recently, farms have seen a rise in debt due to market disruptions, poor weather, and lower income. The SBRA and the FFRA were passed in order to increase the ease and accessibility of Chapter 11 and Chapter 12 bankruptcies.

What are the new provisions?

The English Court has, for the first time, handed down judgment on whether the liquidation stay prevents the Financial Conduct Authority (the "FCA") from issuing a Warning Notice under sections 92 and 126 of the Financial Services and Markets Act 2000 ("FSMA") without first seeking leave from the Court.