No one could have predicted the impact of the COVID-19 pandemic on businesses and economies worldwide. It has crippled companies all over the world with household names such as Macy’s in the US filing for bankruptcy and closer to home, the collapse of commodities trading giant Hin Leong Trading. Unfortunately, analysts speculate the worst is yet to come.

The Coronavirus (COVID-19) has had a significant impact on businesses in Uganda and the world over, with governments having to enforce lockdown measures to contain the spread of the virus. In Uganda, statutory instruments were published by the Ministry of Health directing certain places of business to remain closed and prohibiting movement of public transport and private cars for approximately 56 days, leading to interruptions in business operations, a reduction in consumer demand and low cash flows to meet expenses and debts owed to creditors.

On 25 June 2020, the Corporate Insolvency and Governance Act 2020 (the Act) received Royal Assent and it now forms part of UK law. Among other provisions, the Act addresses the difficulties faced by UK companies as a result of the COVID-19 pandemic when it comes to holding meetings of shareholders and filing documents with the UK Registrar of Companies (Companies House).

The Act includes the following in relation to company meetings and filings:

Meetings

The impact of COVID-19 and the ongoing response to same has seen businesses in Ireland face unprecedented levels of disruption and uncertainty. Whilst companies are faced with unique challenges as the scale of the pandemic and its response continues to evolve, directors remain subject to their duties and responsibilities under the Companies Act 2014 (the ‘Act’) and other statutory obligations including in respect of employment and health and safety. It is essential that directors when responding to these challenges are cognisant of their duties and responsibilities.

Ipso facto provision introduced to UK insolvency landscape by the Corporate Insolvency and Governance Act 2020 (“the 2020 Act”).

On 26 June 2020 the Corporate Insolvency and Governance Act 2020 (“the 2020 Act”) finally entered into force. Now it is in its final form, Simon Newman and Christopher Pask of 1 Chancery Lane’s Commercial, Chancery and Property team will be providing their views on its provisions and their impact over a series of updates.

The Insolvency, Restructuring and Dissolution Bill was passed in the Parliament on 1 October 2018 and assented to by the President on 31 October 2018. Today, i.e. 30 July 2020, the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) will finally come into effect. In this article, which is the first of five in a series of articles covering various aspects of IRDA, we will provide an overview of its main features.

History of Singapore’s insolvency regime

In March 2020, Business Secretary Alok Sharma announced that provisions on wrongful trading would be suspended. The move came as part of a wider package of measures that sought to provide assistance to businesses – and their beleaguered boards – experiencing financial distress due to Covid-19.

Now set out in the Corporate Insolvency and Governance Act 2020 (CIGA), which was passed on 26 June 2020, the provisions adapt the wrongful trading regime making directors’ liability for the “relevant period” unlikely.

Why does it matter?

The Corporate Insolvency and Governance Act ("the Act") came into expedited effect on 26 June 2020 and is intended to maximise the chance of corporate survival and reduce the threat of personal liability on directors during this unprecedented economic crisis.

D&O insurers should be clear about one thing: this Act will not help them and in fact it could well make things worse.

The Act

The UK's Supreme Court ("UKSC") has handed down its judgment following the hearing of the appeal in the case of Sevilleja v Marex Financial Limited [2020] UKSC 31 ("Marex"). The appeal was against the decision of the Court of Appeal to find that the rule of reflective loss applied to 90% of Marex's claim, which was brought in its capacity as a creditor.

The appeal was unanimously allowed by UKSC and it confirmed the rule did not extend to creditors.

Following the recently announced extension of the JobKeeper programme and the Federal Government’s Budget Update, we revisit the relief measures available to corporations experiencing financial distress during the COVID-19 pandemic, which are currently scheduled to end in September.

Temporary measures scheduled to end on 24 September 2020