Preparation of financial statements and corporate income tax, recommencement of time periods, remote trials, gradual return to workplaces, insolvency proceedings and compliance with criminal law
Distressed M&A
Any downturn tends to produce a surge of distressed m&A opportunities, and the current crisis will be no different. Investments in distressed companies follow a different set of rules to "normal" m&A transactions, bringing additional complexity in terms of the stakeholders involved and deal structuring, as well as particular set of challenges for due diligence and buyer protections.
Virgin Australia Airlines operated a fleet of 144 aircraft of which 142 were leased to approximately 73 lessors and financiers when the Board resolved to appoint Administrators on 20 April 2020 because of concerns as to solvency. Virgin Australia Airlines Pty Ltd is the second largest airline operating in Australia.
The COVID-19 pandemic has affected businesses all over the world. Whilst directors will actually consider that their primary responsibility is to keep the business running during difficult times, it is equally important to bear in mind that this should be done in accordance with the law and via appropriate means. A director should always have regard to the company's financial status and avoid entering into transactions that are in breach of his/her fiduciary duties as director, especially when the company's solvency is open to question.
Malta has, to date, chosen to address corporate distress as a result of the COVID-19 pandemic by extending credit capacity through the issuance of State guarantees, thus allowing them access to financing channels that would otherwise have been impossible to secure.
The country seems now ready to jump onto the insolvency-buffer bandwagon, several weeks after the rest of the world began to enact special COVID-19 inspired amendments to their insolvency laws. Bill 128 of 2020 proposes amendments to the Companies Act which include, inter alia:
The UK Department for Business, Energy and Industrial Strategy introduced the Corporate Insolvency and Governance Bill (the Bill)1 into Parliament on 20 May 2020. The Bill is due to proceed through Parliament on an accelerated timetable and is expected to come into force without changes towards the end of June 2020.
Different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. However, this obligation not to continue wrongful trading is at the heart of trust in a market-based economic system.
The Federal Court, in the second significant case arising out of the Virgin collapse, has made extraordinary limited recourse and limited liability orders on application by the Administrators.
In the second of our series of articles on the much anticipated Corporate Insolvency and Governance Bill (the “Bill”), which will enact various new corporate restructuring tools well as make temporary changes to insolvency law as a result of the coronavirus, we focus on the temporary changes to the law regarding the suspension of liability for directors for wrongful trading during the coronavirus pandemic.
Included in this update: Corporate Insolvency and Governance Bill introduced to Parliament; FRC updates guidance on corporate governance and reporting and more...
Corporate Insolvency and Governance Bill introduced to Parliament