The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) established the Paycheck Protection Program (PPP), a lending program for small businesses pursuant to which up to 100 percent of the principal loan amount is forgivable. While the PPP program has been a boon to business struggling in light of the ongoing pandemic, the SBA has sought to limit access by bankrupt borrowers, eliminating a significant number of otherwise eligible businesses and creating significant legal questions and issues.
This note sets out the circumstances in which a creditor may successfully lift a statutory moratorium against a company in administration in England and Wales, and in Singapore.
English law
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What is a tenant or landlord to do if the tenant can no longer afford the premises they have leased?
In the light of increased volatility across many markets and disruptions to economic activity, parties to transactions that are subject to ISDA Master Agreements1 will need to think about what strategies they would adopt if an Event of Default occurs with respect to their counterparties.
Choices
The extraordinary disruption to UK business caused by the COVID-19 lockdown has spawned much discussion about changes to existing insolvency laws to help businesses which are struggling to survive in this abnormal environment. One topic of discussion has been the so-called ‘light touch’ administration. Here we provide a quick overview of what this involves.
What do we mean by a ‘light touch’ administration?
A recently published decision from the Technology and Construction Court, which examined the widely debated issue of whether companies in liquidation can adjudicate, could have increasing significance over the coming months in light of the Covid-19 pandemic.
The Government has already taken steps to prevent landlords of commercial premises in England and Wales from forfeiting leases for arrears of rent. This restriction presently lasts until 30 June 2020, but may be extended.
Impact on payment of rent
Rent due was not forgiven and landlords were still able to take various enforcement steps to recover rent, including the use of insolvency proceedings.
Applying for permission to advance fresh evidence on appeal is a tricky application, which has had varying degrees of success in the courts. Zheng Yougxiong v Gate Ventures Plc(1) is a useful example of the application of the criteria, albeit in the context of insolvency proceedings.
Background
Mr Zheng was a shareholder in, and creditor of, Gate Ventures plc. He sought and failed to obtain an administration order against Gate Ventures plc on the basis of a £2.5 million debt (the First Application).
In accordance with the resolution adopted by the seven-judge panel of the Supreme Court dated 20 November 2019, case file no. III CZP 3/19, it is not admissible to stipulate liquidated damages in the case of rescinding an agreement due to the failure to perform an obligation of a pecuniary nature.
Numărul de insolvențe în România este, la momentul de față, semnificativ și, cel mai probabil, urmează a înregistra un trend ascendent având în vedere prognozele economice care prefigurează – pentru perioada următoare – o nouă recesiune economică.