Introduction
The immediate focus for Britain’s authorities when dealing with the COVID-19 pandemic has been, quite rightly, to secure the best possible health outcome for the greatest number of people.
Subsequently, following a wave of concern regarding the best way of maintaining the financial status-quo for (i) businesses, (ii) employees, and (iii) individuals, the UK government announced an unprecedented series of assistance programmes, designed to counter the impact of previously unknown, and unquantifiable, distress.
Al fine di mantenere la sopravvivenza e la proattività delle imprese durante la crisi coronavirus, in data 1o aprile 2020 l’Autorità Garante della Concorrenza e del Mercato (AGCM) ha adottato una comunicazione[1] sull’interpretazione dell’art. 103 del c.d. “Decreto Cura-Italia”[2], con la quale vengono sospesi i pagamenti delle sanzioni tanto in materia di concorrenza quanto di tutela del consumatore.
With respect to the dynamic course of events regarding COVID-19 – commonly known as the coronavirus – we address the threat of insolvency and related liability of the statutory bodies (Directors) and provide a list of practical mitigating steps
Introduction
Clearly there are some major economic challenges ahead.
Many businesses may be able to withstand the challenges ahead but it may very well be that their trading counterparties (whether suppliers, customers or other stakeholders) will not. Whilst these times can represent an opportunity for some, such as potential acquirers (whether of businesses, assets or distressed debt), in most cases, the climate represents a threat to businesses.
Merger control rules are still fully applicable in times of crisis. Any transactions that (i) lead to a change of control over a business or a part of a business on a lasting basis; and (ii) trigger the jurisdictional thresholds in the EU or a Member State’s merger control regulations, are still considered “reportable transactions” that require prior clearance.
The Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) was submitted to the Dutch parliament last year and, once adopted, introduces a framework under which tailor-made (financial) restructuring plans can be implemented outside formal insolvency proceedings.
The WHOA combines elements of the English Scheme of Arrangements, US Chapter 11 and the EU Restructuring Directive (EU 2019/1023).
The following is an overview of the WHOA's most important features.
The procedure
This briefing looks at the potential impact of the coronavirus COVID-19 on businesses and examines steps that can be taken by stakeholders and directors to recognise, manage and mitigate the risks. In particular, we look at: the potential impact on businesses; managing insolvency risk; considerations for directors; and considerations for lenders.
Global outlook for the coronavirus situation
Last Friday, in response to the outbreak of the coronavirus pandemic (COVID-19), the German government announced various measures described as a big "bazooka" to avert a crisis in the Eurozone's largest economy. The German development bank KfW will play a key role in the context of the announced measures and has been tasked to provide liquidity assistance to German companies hit by the pandemic.
A second bankruptcy petition was brought by a Russian bank against a Russian debtor, who was already bankrupt in Russia. The petition was based on Russian law debts, for which the bank had already proven in the Russian bankruptcy. The petition was defended on the basis that the bank did not have standing to petition. Under Russian law, when bankruptcy proceedings are opened, creditors can only prove in the Russian bankruptcy and cannot take any other steps.
The German Federal Government is currently working on a Law for the Mitigation of the consequences of the COVID-19 pandemic in the areas of Insolvency, Corporate, Civil and Criminal Procedure Law. Ministry officials are working through the weekend with the goal to get the legislation finalized by both chambers of parliament as early as possible next week.