The economic uncertainty for companies caused by the Covid-19 pandemic has placed a heavy burden on directors. That burden of responsibility is set to become even heavier as the temporary measures introduced in 2020 to support companies during the pandemic come to an end. Small and medium sized enterprises (“SMEs”) and those businesses operating in the travel, hospitality, leisure and manufacturing industries have been impacted in particular.

​Bedivere Insurance Company has been placed into liquidation and a deadline of December 31, 2021 has been set as the deadline for policyholders to file a Proof of Claim.

The Pennsylvania Commonwealth Court has ordered Bedivere Insurance Company to be liquidated and the Pennsylvania Insurance Commission has taken over its remaining assets. Bedivere Insurance Company’s year-end 2020 financials showed a negative $227.5 million in policyholder surplus. The policyholder surplus at the end of 2019 was $24.2 million. Asbestos losses drove the deterioration.

A year ago, many predicted that the COVID-19 stay-at-home orders and social distancing guidelines and their impact on the economy would result in a deluge of bankruptcy filings that could rival the Great Recession of 2008-2009. However, as we approach the one-year anniversary of former President Trump declaring the SARS-CoV-2 novel coronavirus a national emergency, that prediction has not come to pass.

Davies Restructuring Review 2021: Issue 1 Contents The Insolvency Landscape One Year into the COVID-19 Storm 01 Global Outlook on Corporate Insolvency: Lessons from Past Crises?

While the world wrestles with the day-to-day realities of the pandemic, 2021 will bring further challenges. With the memory of the litigious and regulatory aftermath of the global financial crisis still fresh, what should be on your radar?

1. Disputed margin calls and close-outs

Policyholders with Home Insurance Company policies should be aware that the court in the Liquidation of Home Insurance Company has entered an Order setting the claim amendment deadline.

The proposed new regulations to safeguard the proprietary of pre-packs have caused alarm in the profession, one of the areas of concern being the requirement that the Evaluator central to the process requires no professional qualifications but thankfully are qualified if they think they are (yes, you did detect some sarcasm).

The Regulations will mean that an administrator cannot execute a pre-pack if the following applies:

Does a debtor’s pre-petition change of the beneficiary of a life insurance policy constitute a “transfer” of an interest of the debtor in property? Not according to the U.S. Bankruptcy Court for the Eastern District of North Carolina, which held earlier this week that such transfers do not “diminish” the estate.^[1]

The Covid-19 pandemic has had a severe impact on the economy. This has given rise to an increasing number of claimants with claims against insolvent businesses.

In these circumstances, a third-party claimant would usually notify the company’s insolvency practitioner of its claim. The claimant is then required to pursue its recovery as part of the insolvency process alongside other creditors.

The Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act)¹

1.1 Corona Relief Fund (for more details check out our legal insight)