Introduction

The confinement measures adopted by various governments to fight the Covid-19 outbreak have severely impacted the financial position, and particularly cashflow, of many undertakings. Revenues have completely or partially dried up, whilst overhead and recurring costs continue to be incurred.

In these unprecedented times there has been much discussion and focus in the property community of the effect of tenants unable to operate their businesses and the risks of widescale insolvencies.

As the COVID-19 pandemic marches on, more homeowners than ever are seeking assistance from their lenders.

Around the globe, our lawyers are receiving a large number of enquiries about mitigating the impact of the coronavirus disease 2019 (COVID19) on companies’ business operations and finances. Governments in several countries have reacted quickly to try to mitigate COVID-19’s impact by changing or amending their insolvency laws. This memorandum is an overview of the key changes in restructuring and insolvency laws that select countries have undertaken in response to the COVID-19 pa

The Singapore Court of Appeal has clarified the standard of review that applies to winding-up applications where the underlying relationship between the debtor and creditor is subject to an arbitration agreement.

Background

Under Section 254(2)(a) of the Singapore Companies Act, a company can be wound-up by the court upon the application of a creditor who has served a statutory demand on the company for a debt of SGD 10,000 or more and the debt continues to remain unpaid for three weeks thereafter.

On April 24, the Small Business Administration published additional interim rules which clarified that the SBA would not allow Paycheck Protection Program (PPP) loans to be used for debtor in possession (DIP) funding by stating as follows:

Jurisdiction to hear a case related to a temporary layoff procedure due to force majeure caused by COVID-19 lies with labor courts not the insolvency judge

Decision by León Commercial Court, April 1, 2020

Our recent blog discussed the decision in Re Carluccio’s Limited (in administration) [2020] EWHC 88D (Ch) where the Court considered whether administrators would “adopt” the employment contracts of employees they furloughed after the 14 day grace period.

Small businesses often struggle to reorganize in bankruptcy. To address this issue, Congress passed the Small Business Reorganization Act of 2019 (the SBRA). The SBRA took effect in February 2020 and makes small business bankruptcies faster and less expensive.