Notwithstanding the phased return to some level of normality, some businesses will continue to be significantly affected, particularly those in the leisure, travel/tourism, retail and hospitality sectors. These sectors will face longer term challenges due to social distancing requirements, consumer unease and the likely absence of international travel for many months, or perhaps even longer. However, these are not the only sectors that will suffer.
The High Court recently refused to grant an order sought by a Revenue-appointed liquidator, requiring Google Ireland to provide him with access to a private Gmail account. The Gmail account in question was believed to have been operated by the liquidated company. For their part, Google strongly resisted the liquidator’s application, citing concerns over protecting the privacy of individuals. It argued that the liquidator was seeking access to the entirety of the Gmail account which could contain diary entries and photographs as well as emails.
The Office of the Director of Corporate Enforcement (ODCE) has provided guidance on its approach to directors of companies, made insolvent by the COVID-19 pandemic, who act in good faith on objective evidence in trying to rebuild their businesses.
The issue
The consequences of the COVID-19 crisis have made many businesses that were solvent, and will likely become solvent again, technically insolvent.
The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, if approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime. The Bill includes a number of measures designed to protect businesses which are struggling as a result of the coronavirus pandemic. Some of these measures are temporary, however parliament may decide to extend these if necessary.
The key measures included in the Bill are summarised below.
Temporary provisions
The Corporate Insolvency and Governance Bill (“Bill”) is currently going through Parliament and, once approved, will introduce wide-ranging changes to the UK’s corporate insolvency regime.
Notwithstanding the phased return to some level of normality, some businesses will continue to be significantly affected, particularly those in the hospitality sector where longer term challenges may be encountered due to social distancing requirements, consumer unease and the likely absence of international travel for many months, or perhaps even longer.
The Government has put in place substantial measures that are intended to help mitigate the devastating effect of Covid-19 on the UK economy. Many businesses are now facing their toughest test in living memory. Yet even as the UK endures extraordinary lockdown measures, and with some 3.9 billion people in global isolation, directors of UK companies must continue to try and keep their businesses out of insolvency.
Irish companies are facing challenges with the sudden changes imposed on their businesses as a result of the impact of COVID-19. Some may be experiencing cash flow difficulties; others may have had to temporarily cease trading altogether.
Directors are responsible for managing their company’s affairs. This requires them to identify and navigate risks, and to ensure that appropriate strategies and where necessary contingencies are in place to anticipate and deal with such risks.
Following the outbreak of a global pandemic unprecedented in recent memory, the UK is now reeling from the devastating effects of the coronavirus. Small and medium-sized businesses throughout the nation will already have been forced to come to terms with this new reality, through a combination of staff illness, forced closures, supply chain disruption and loss of business.
COVID-19 is an unexpected shock for many businesses. Some businesses are being significantly affected, particularly those in the travel and hospitality sectors. We consider some of the options open to otherwise good businesses facing cash-flow and other financial issues as a result of COVID-19.
How are governments dealing with COVID-19