Covid-19 is top of the agenda for businesses globally — and for good reason.

It has now been classified as a worldwide pandemic and numbers of those affected are on the rise each day. It has already had some devastating effects on the markets and now with some countries being on complete lockdown, issues such as survival of businesses and trading while potentially becoming insolvent need to be seriously considered by companies and their directors.

Many businesses – from manufacturers ("OEMs") to retailers - are reliant on receiving regular supplies from third parties for their trade. COVID-19 has produced an instant global economic shock that is – inevitably – affecting global supply chains. It is unclear whether the economic effects of COVID-19 will be long or short term, but here are some of the things that businesses which are dependent on their supply chain should be asking themselves.

What is the length of the supply chain and what jurisdictions does it cross?

30 March – 5 April 2020 COVID-19 Weekly Report | 06/04/2020 © Copyright LBR 2020 2 Table of contents 1. Executive summary............................................................................................................................................ 3 2. Key legal issues this week ................................................................................................................................. 4 3. Recent developments ........................................................................................................................................ 5 4.

Regardless of a company’s success or confidence in its strategy, management, and board, there are few situations public companies face that are more daunting than an unsolicited approach by an activist investor. And with activist activity continuing to rise—2018 saw a record number of companies targeted by activists, a record number of activist campaigns launched, a record number of board seats won, and a rising bench of first-time activists—all companies need to be prepared.

Financial institutions continue to prepare for the anticipated cessation of the publication of the London Interbank Offered Rate (LIBOR) benchmark after the end of 2021 and its replacement with “risk-free” overnight rates, including reformed SONIA (for sterling) and the new SOFR rate (for U.S. dollars). Transitioning affected financial products to the new rates and amending legacy books is a massive project for any sizable institution.

Bankruptcy partner Brian Hermann and counsel Lauren Shumejda co-authored the chapter, “U.S.: New Strategies for Getting Paid: Recent Investment Fund Activity in Chapter 11,” in the 2019 edition of the Global Restructuring Review (GRR) Special Report, “The Restructuring Review of the Americas.”

On 8 February 2018, the Hong Kong Court of First Instance (the “Hong Kong Court“) ruled that the common law power to recognise and assist foreign insolvency proceedings extends to voluntary liquidations – this is the first authority on this issue in Hong Kong.

Case: IN THE MATTER of an application for recognition and assistance by the Joint Liquidators of Supreme Tycoon Limited (in liquidation in the British Virgin Islands) [2018] HKCFI 277

Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.

Director and parent company liability

Liability

Under what circumstances can a director or parent company be held liable for a company’s insolvency?

Chris Howard, Sullivan & Cromwell

This is an extract from the first edition of GRR's The Art of the Ad Hoc. The whole publication is available here. 

The relationship of an ad hoc committee with its stakeholder constituency

No power to bind: the importance of the underlying finance documents in relation to decision making

Last month the Insolvency Working Group released its second and final report, dealing with voidable transactions and Ponzi schemes.  The Group's first report was released in July 2016 and dealt with regulation of insolvency practitioners and voluntary liquidations.  In the second report, the Working Group make a number of recommendations on the voidable transaction regime and regarding protection from Ponzi schemes.  In relation to voidable transactions, the primary recommendations were repealing the "gave value" part of the defence available to creditors with a view to incre