The U.K. Government has published the U.K. Corporate Governance and Insolvency Bill. The Bill amends aspects of insolvency and company law to assist firms struggling to cope with the effects of the COVID-19 pandemic. The measures include: 

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

Re Debenhams Retail Limited (In Administration) [2020] EWCA Civ. 600

In these unprecedented times there has been much discussion and focus in the property community of the effect of tenants unable to operate their businesses and the risks of widescale insolvencies.

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.

Re Debenhams Retail Limited [2020] EWHC 921 (Ch)

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

The Carluccio’s judgment provides some much-needed clarity on the interrelation of the Furlough Scheme and the requirements of insolvency legislation. It is to be commended for its clarity and for the fact that it had to construe the workings of the Furlough Scheme in the absence of any statutory guidance as to its implementation. It is to be hoped that, when the Government comes to enact the necessary legislative measures (including perhaps amendments to Schedule B1 and IR 2016), that it does so with this judgment very firmly in mind.