Even before the advent of Covid-19, insolvency-related D&O claims already made up a large part of the management risk landscape.

Corporate insolvencies are on the rise. 2019 saw the highest level of underlying insolvencies since 2013, with the retail, hospitality and construction industries particularly affected. As the ongoing uncertainty of the pandemic further increases the risk that companies will run into financial difficulties, insolvency can only continue to make up a large source of directors’ and officers’ (D&O) claims.

The national lockdown in South Africa has left many companies financially distressed and unable to meet their contractual obligations. Looming on the landlord’s horizon may well be its approach to tenants who are placed under business rescue.

Days ago a lawyer's answer to these questions would have been the all too often heard "well, it depends". There would have been a serious risk of any such adjudication being stopped by the court granting a mandatory injunction to halt it. Ask the same questions again now and the response would be a resounding "yes and yes!"

It is imperative that companies in financial distress prioritise their continued existence and consider business rescue as an alternative to liquidation. One of the major advantages of the business rescue process is the moratorium (stay) on legal proceedings which aims to give financially distressed companies sufficient breathing space to trade out of its insolvency. A temporary moratorium automatically comes into operation upon the filing of a resolution placing the company into business rescue or the issuing of an application for an order to this effect.

It is imperative that companies in financial distress prioritise their continued existence and consider business rescue as an alternative to liquidation. Business rescue is a robust procedure that allows South African companies in financial distress or trading in insolvent circumstances to file for business rescue and with the assistance of a business rescue practitioner, reorganise and restructure the business with the aim of returning it to a more stable and profitable entity.

The UK Government has finally set out details of the proposed measures to temporarily restrict the use of statutory demands and winding up petitions during the worst of the COIVD-19 pandemic

The Covid-19 pandemic has had a devastating impact on the South African economy with several enterprises struggling to remain profitable. Their continued operation remains threatened by the imposition of trade restrictions pursuant to the national lockdown and South Africa’s subsequent economic downgrade to junk status.

Less than three weeks after the Intervention Measures to Mitigate the Effects of the COVID-19 Infectious Disease Epidemic on Citizens and the Economy Act (Zakon o interventnih ukrepih za zajezitev epidemije COVID-19 in omilitev njenih posledic za državljane in gospodarstvo; the “Intervention Act”) came into force, new amendments are on their way.

Slimming down a company, corporate and financial restructuring will be on minds of many managers and company owners in the coming months.

In practice, when deciding to wind down a company, often a decision needs to be made whether to trigger a regular wind-down (likvidacija), a fast-track wind-down (prenehanje družbe po skrajšanem postopku) or a bankruptcy proceeding (stečaj). The main goal usually is to close down the company with less cost and no liability for the shareholder or the management.

1. What to address first

All insolvency proceedings (bankruptcy, and compulsory settlement) and court-sponsored financial restructurings (preventivna prestrukturiranja) in Slovenia are on hold until the recall of the COVID-19 epidemic (proceedings are currently expected to be on hold until 1 July 2020) (the "Recall"). During this time courts will not conduct the above-mentioned proceedings and no procedural and material deadlines will run.