On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, Public Law No. 116-136 (the “CARES Act” or the “Act”), the stimulus package designed to mitigate the widespread economic impacts of the coronavirus (“COVID-19”). The Act includes important temporary modifications [1] to Subchapter V of the Bankruptcy Code (the “Code”), applicable to small -business debtor reorganizations.

Temporary Increase in Debt Limit

It is clear that there are going to be incredible impacts to businesses and companies of all sizes as a result of the COVID-19 pandemic. No business will be immune to the impact of this health epidemic. Across the globe, governments have responded in various ways to change insolvency laws in an attempt to provide assistance to those businesses affected directly or indirectly by COVID-19. Australia is no different and the Federal and State Governments have responded quickly to the crisis.

What specific provisions does the new law contain for tenancies?

Under the Insolvency Suspension Act COVID-19 (COVInsAG), the obligation to file for insolvency is suspended under certain conditions due to the coronavirus. The regulations apply retroactively to 01.03.2020.

The coronavirus is spreading fast. Measures to slow its spread are already hitting companies hard and will cause many companies considerable financial difficulties in the foreseeable future.

Obligation to file for insolvency

COVID-19 has had impacts on contracts relating to commercial undertakings (e.g., construction projects), commercial and industrial tenancies, and individual consumer transactions (e.g. bookings for events). Individuals or companies who are unable to meet their obligations may have to pay damages or forfeit deposits. Otherwise stable businesses may be sued and face lengthy litigation or possible insolvency.

On 1 April 2020, the Ministry of Law announced that it intended to introduce the COVID-19 (Temporary Measures) Bill (“Bill”) in Parliament within one week. The Bill aims to provide temporary relief and protection for individuals and companies who are unable to fulfil their contractual obligations because of COVID-19.

The Covid-19 crisis is impacting on all businesses across Germany including the dynamic German start-up scene. In this article we outline some of the more important measures taken by the German government to support start-ups through the crisis. These measures include providing immediate financial support, loan finance, subsidies for short-time work schemes, relaxation of management obligations to file for insolvency, tax relief schemes and the suspension of social security payment obligations.

The German government has moved quickly and decisively to protect businesses from the short-term impact of the Covid-19 pandemic. A new law was passed by parliament using remote voting procedures and comes into today, 27 March 2020. The Covid-19 Suspension of Insolvency Law (COVInsAG) provides a protective shield for businesses against the economic fallout caused by the extraordinary measures taken to limit the spread of the SARS- CoV 2 virus which causes the illness we now know as Covid-19.

The law addresses three main areas:

Cash pooling during the COVID-19 pandemic provides particular challenges for management. What the most important issues on which to focus?

Many businesses, particularly those operating internationally, have set up group cash pooling systems to optimise payment processes and maximise liquidity. A well-structured cash pooling system offers a treasury department transparency over the group's liquidity and by centralising financing requirements can reduce costs.

On March 25, 2020, the German Bundestag passed the “Act on Mitigation of the Consequences of the COVID-19 Pandemic in Civil, Insolvency and Criminal Proceedings” (“Act”) as part of the so-called “Corona Package.” The Act passed the German Federal States’ Assembly (“Bundesrat”) in a special session on March 27, 2020, and came into force on the same day.