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.
The impact of Covid-19 on businesses has already been significant, with several high-profile businesses in the UK and the Channel Islands ceasing to trade or entering administration. The sudden drop in custom as a result of restrictions imposed to protect the community from Covid-19 (the Restrictions) have resulted in businesses experiencing severe, if not crippling, cash flow issues.
In Autumn 2018 the States of Guernsey proposed changes to Guernsey’s corporate insolvency regime to come into effect in 2019. On 15 January 2020 the States of Guernsey enacted these changes with the passing of the Companies (Guernsey) Law 2008 (Insolvency) (Amendment) Ordinance 2020 (the Ordinance).
The Ordinance brings into effect the proposed changes to create a structured, flexible and transparent regime for company insolvency procedures in Guernsey, as is required in a modern jurisdiction. A summary of the main changes is set out below.
Administration
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
As outlined in our client publication of March 27, 2020 (Update for Borrowers and Lenders in Germany), by a new law effective since March 27, 2020 (the “German Covid-19 Insolvency Law Amendment”), the obligation of the management of a legal person pursuant to section 15a of the German Insolvency Act (“German InsO”) has been suspended until September 30, 2020 if certain conditions are met.
On 28 March 2020, the Secretary of State for Business, Energy and Industrial Strategy (BEIS) announced key measures to protect companies and businesses facing major funding and operational difficulties in the current COVID-19 pandemic.[1] The measures will involve the Government bringing forward legislation at the earliest opportunity to amend current U.K. insolvency law to give firms extra time and space to weather the current storm while ensuring that creditors can get the best return possible in the circumstances.
In light of the growing pandemic of COVID-19 the German government has decided on a number of unprecedented restrictions for all areas of private and business life which were unimaginable just a few weeks ago. As a result, many production facilities and businesses had to shut down. While the consequences for many companies are already dramatic, the full impact on the economy is still unpredictable as it is unclear how long the current restrictions will subsist.
The oil price plunge starting on March 6 seems like a sucker-punch to the oil and gas industry after the price decreases and market unrest as a result of COVID-19. However, for those with capital to spend, including international players, it will lead to opportunities to acquire assets and distressed companies (including acquisitions of asset packages, acquisitions of companies, and take-private transactions). U.S. Bankruptcy law can be daunting for many foreign investors; however, the bankruptcy process can provide real advantages.
The oil plunge starting on March 6 seems like a sucker-punch to the oil and gas industry after the price decreases and market unrest as a result of COVID-19. However, for those with capital to spend, it will lead to opportunities to acquire assets and distressed companies (including acquisitions of asset packages, acquisitions of companies, and take-private transactions). Below, we highlight five things to think about in connection with acquisitions of assets from distressed companies.
The oil price plunge starting on March 6 seems like a sucker-punch to the oil and gas industry after the price decreases and market unrest as a result of COVID-19. Midstream companies that rely on long-term producer contracts or steady revenue streams for moving hydrocarbons need to act quickly to mitigate the risks of a potential producer insolvency. Below, we highlight five things to think about on this front. Our energy team is experienced in these issues and invites the opportunity to discuss them with you and answer specific questions you may have.