United States: Federal Reserve releases details of lending programs in response to COVID-19 pandemic, including Main Street lending program for mid-sized businesses
On 9 April 2020, the Federal Reserve announced that it would be providing up to USD 2.3 trillion in loans to support the US economy in response to the COVID-19 pandemic.
Financial Assistance (1)
[UPDATE] Which government support schemes are in place?
The Federal Government has set up a fund of initially EUR 4 billion by establishing financing companies. With the third 3rd COVID-19 Act, which was passed in the National Council on 03 April, the Federal Government is increasing the fund's resources to up to EUR 28 billion.
An additional financial aid package of up to EUR 34 billion shall consist of
The Singapore Ministry of Law will introduce the COVID-19 (Temporary Measures) Bill (the Bill) in Parliament next week to address the impact of COVID-19 on businesses and individuals' ability to fulfil their contractual obligations. The Bill will also make some temporary changes relating to bankruptcy and insolvency.
The Bill will apply to various categories of contracts, including:
This week’s TGIF focuses on themes that are emerging as Australia moves to an economic recovery phase and sees the end of government intervention to prevent insolvencies.
Key takeaways
The respondent in this matter, Mr Culleton, owed Macquarie Leasing Pty Limited (Macquarie) a debt arising out of two chattel mortgage agreements.
Macquarie obtained judgment against Mr Culleton in the amount of $94,304. The judgment debt was not paid and Macquarie petitioned for a sequestration order to be made against Mr Culleton’s estate.
Macquarie served the Bankruptcy Notice on Mr Culleton by affixing it to a padlocked gate at his last known address.
Unlike the GFC, which was essentially a liquidity crisis, Australia is likely to face a gradual increase in business insolvencies, rather than the feared ‘insolvency cliff’, as the Federal Government’s COVID-19 stimulus measures are wound down at the end of March.
The ability of limited recourse provisions to protect borrowers and financiers against insolvency risks may be weaker due to a recent English court case.
Limited recourse clauses are often used in project and structured finance transactions. Borrowers want to avoid the risk of their directors being liable for trading while insolvent; and financiers may want to avoid the possibility of insolvency clawback actions if they seek to enforce their security documents.
"Whenever there is change, and whenever there is uncertainty, there is opportunity."Mark Cuban, American businessman and investor
In the current global market, very few things are clear other than that volatility and change are ever-present.
The recent WA Supreme Court decision in White v Spiers Earthworks Pty Ltd [2014] WASC 139, highlights the consequences of not registering a security interest under the Personal Property Securities Act 2009 (PPSA) when a company becomes insolvent.
The case also provides guidance about certain PPSA savings provisions, the treatment of transitional security interests and the primacy of PPSA over pre-PPSA legislation.
BACKGROUND
This week’s TGIF considers Gogetta Equipment Funding Pty Ltd v Mark & Liz Pty Ltd [2018] VSC 91, which examined a priority contest between competing equitable interests in property.
What happened?