Since the fourth quarter of 2020, prices for building materials have risen sharply. According to media reports, the price of wood alone increased by 15-20 %, whilst prices for petroleum products and diesel fuel rose by 15 % and 20 % respectively. Styropor insulation materials for facades also cost about 25 % more than in December. Reinforced steel has become 30 % more expensive since September.
On 20 April 2020, Singapore’s Ministry of Law announced the commencement of Parts 1, 2 and 3 of the COVID-19 (Temporary Measures) Act (the “Act”) and the regulations for businesses and individuals to comply with (the “Regulations”) in order to seek a temporary suspension of eligible contractual obligations for an initial relief period between 20 April 2020 and 19 October 2020 (referred to as the “Relief Period”).
Having ensured, to the extent possible, the safety of their workplace and workforce, many companies are turning their mind to the economic impact of the COVID-19 pandemic. All businesses are impacted, and in many cases, the impact will be adverse, whether caused by travel restrictions, office or workforce disruptions or decreased demand.
For months, landlords and tenants impacted by the COVID-19 pandemic have wondered whether force majeure clauses in leases would excuse a tenant's non-payment of rent. On June 3, 2020, a Bankruptcy Court for the Northern District of Illinois offered us an early look into how courts might interpret such clauses in the midst of the current crisis. In In re Hitz Restaurant Group, No. 20-B05012, 2020 WL 2924523 (Bankr. N.D. Ill. June 3, 2020), the Bankruptcy Court ruled that Executive Order 2020-7, the Stay-at-Home Order (the "Order") enacted by Illinois Governor, J.B.
Recent weeks have witnessed seismic shifts in the oil and gas industry because of crashing oil prices, demand destruction associated with the COVID-19 pandemic, and crude oil storage reaching record capacity levels. Upstream producers are especially vulnerable to these market pressures and have begun shutting in wells, asserting force majeure, and cutting costs. As counterparties to distressed producers, midstream players face new challenges in navigating contractual relationships and mitigating risk.
The landlord argued that the force majeure clause did not apply at all for three primary reasons. The Bankruptcy Court rejected each of the landlord’s arguments.
One year ago, we wrote that the large business bankruptcy landscape in 2019 was generally shaped by economic, market, and leverage factors, with notable exceptions for disastrous wildfires, liabilities arising from the opioid crisis, price-fixing fallout, and corporate restructuring shenanigans.
The year 2020 was a different story altogether. The headline was COVID-19.