On April 15, 2020, the Finance Minister, Bill Morneau announced that the government will provide immediate, temporary relief to sponsors of federally regulated defined benefit (DB) pension plans. This relief will be in the form of a moratorium, through the remainder of 2020, on solvency payment requirements for federally regulated DB plans.
With the fourth law on COVID-19, the Austrian legislator has suspended the obligation of an overindebted debtor to file for insolvency until 30 June 2020, irrespective of the cause of the over-indebtedness. Some other countries in the CEE region have also adopted measures to combat the consequences of COVID-19 as detailed in the following overview:
Die COVID-19-Pandemie und deren wirtschaftliche Auswirkungen führten bisher zu insgesamt fünf umfassenden COVID-19 Gesetzespaketen. Darunter finden sich ua Änderungen im Insolvenz-, Anfechtungs- und Eigenkapitalersatzrecht, mit denen die wirtschaftlichen Auswirkungen der COVID-19-Pandemie adressiert werden sollen. Ein erster Schritt in die richtige Richtung, weitere insolvenzrechtliche Anpassungen werden aber folgen müssen. Im Folgenden wird ein Überblick über die wesentlichen insolvenzrechtlichen Änderungen gegeben.
Verlängerte Insolvenzantragsfrist
Bulgaria has been in a state of emergency since 13 March due to the COVID-19 outbreak. On 23 March the Parliament voted on a special State of Emergency Act (COVID-19 Act) which suspended all court, arbitration and enforcement terms and proceedings during the state of emergency, currently in force until 13 April.
On 14 March 2020, the Croatian Ministry of Justice issued recommendations to prevent the transmission of the novel coronavirus (COVID-19) and control the pandemic ("Measures"). The Measures are applicable until 1 April 2020. The Measures advise temporary adjustments to legal requirements in civil, insolvency and criminal procedure law to avoid hardship that would otherwise arise as a result of the coronavirus crisis.
With the aim of further mitigating the negative effects of the crisis on companies and private individuals, the Measures advise the following:
Canada’s two main insolvency and restructuring statutes, the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA) were recently amended to include a new duty of good faith on the part of all “interested persons” involved in an insolvency proceeding. The amendments do not define “good faith” or “interested persons”. Although requiring all participants in an insolvency proceeding to act in good faith may be a laudable objective, the statutory amendments are problematic.
The Supreme Court this winter will hear (and in one case, has heard and determined) high-profile appeals involving federal and provincial government powers, corporate rights under the Charter of Rights and Freedoms, and two complex commercial appeals.
The Court is also expected to release several decisions on contract law in 2020 that will have significant implications for businesses.
Appeal Heard and Decided
Shareholders of Austrian limited liability companies usually want to have influence over whom they are associated with. That's why shareholders often agree on a pre-emptive right (Aufgriffsrecht) to purchase existing shares in certain cases, e.g. in case of insolvency proceedings against a shareholder. However, according to the recent case law of the Regional Court of Linz on limited liability companies, pre-emptive rights to purchase the shares of an insolvent shareholder are invalid and unenforceable.
Know your co-shareholders
On August 27, 2019, Quebec's Court of Appeal overturned the Quebec Superior Court's decision to give post-filing claims priorities over secured creditors' claims, stating that section 11.01 of the CCAA does not give automatic priority to post-filing creditors.
Background
The Austrian Supreme Court has recently found that insolvency related avoidance claims can be sold. This may open a whole new business segment and will most certainly have a material impact on defendants in avoidance proceedings.
Assignability of insolvency related avoidance claims