Certain governments have taken (extensive) measures to help businesses and its employees. This leads to an entire new and unprecedented market situation and results in sometimes unprecedented legal issues which require swift but thorough assessment, both from a national and cross-border perspective. To provide companies and its directors with some general guidelines in these times of uncertainty, our international Restructuring and Insolvency team has prepared an overview of certain pressing legal issues.

In its April 2018 decision, the BGH ruled on the question whether the directors of a company that has been granted debtor in possession status by the respective insolvency court can become personally liable for a breach of a duty of care vis-à-vis the creditors like an insolvency administrator. The underlying legal question was the subject of a controversial academic discussion in the past.

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.

Companies in Financial Difficulties Duties and Liabilities of Directors under Irish Law

Matheson Directors' Guidance Series

Companies in Financial Difficulties Duties and Liabilities of Directors under Irish Law

Fergus Bolster and Emma Doherty 10 October 2018

www.matheson.com

Companies in Financial Difficulties Duties and Liabilities of Directors under Irish Law

Introduction

This document summarises the principal duties and potential liabilities of directors under Irish law where a company is in financial difficulty.

In ordinary business circumstances, the directors/managers of a Luxembourg company have a duty to file for bankruptcy within one month of the meeting of the two criteria for bankruptcy (under threat of criminal sanction) – this is the so called “Insolvency Filing Obligation”. The two parts of the test for bankruptcy are: (i) cessation of payments (or so called missed creditor payment) and (ii) loss of creditworthiness.

In light of the COVID-19 crisis, a Grand Ducal Regulation was published on 25 March 2020 (the Regulation)[1] that suspends certain procedural deadlines applicable in civil and commercial matters during the Luxembourg state of crisis. The Ministry of Justice has clarified that this suspension also relates to insolvency matters.

As the outbreak of COVID-19 continues to develop, unprecedented issues are affecting the private equity industry. We have identified certain challenges both on a fund and portfolio company level, and measures that will be implemented by the Dutch government that can help you and your portfolio companies to survive the COVID-19 crisis.

Would you like to view the most important topics, measures and tips we have selected and our dedicated private equity team? Read the pdf-file below.

Introductory remarks

The coronavirus (COVID-19) is currently causing concern and uncertainty and poses challenges to companies and individuals alike. A number of legal issues are also emerging, whether in relation to contractual obligations, labour law matters or corporate law aspects. This article aims to highlight the most important points from a Swiss law perspective and to clarify legal issues in the elaboration of possible courses of action.

1. Commercial contracts

1.1 Force majeure

Re System Building Services Group Limited [2020] EWHC 54 (Ch)

Summary

A recent High Court ruling has considered the character and extent of directors’ duties in the context of insolvency.

In System Building Services, Insolvency and Companies Court Judge Barber (“ICCJ Barber”) considered, amongst other things, the nature of a director’s duties to a company and whether those duties survive the company’s entry into an insolvency process.

The case of Hunt (as Liquidator of System Building Services Group Ltd) v Michie & Ors [2020] EWHC 54 (Ch) examines whether directors’ duties continue after the company has become insolvent and confirms that they do, bringing welcome clarity to the point. As such, Insurers will need to review their policies to make clear if they wish to cover this risk.