Introduction

Virgin Australia Airlines operated a fleet of 144 aircraft of which 142 were leased to approximately 73 lessors and financiers when the Board resolved to appoint Administrators on 20 April 2020 because of concerns as to solvency. Virgin Australia Airlines Pty Ltd is the second largest airline operating in Australia. 

The COVID-19 pandemic has affected businesses all over the world. Whilst directors will actually consider that their primary responsibility is to keep the business running during difficult times, it is equally important to bear in mind that this should be done in accordance with the law and via appropriate means. A director should always have regard to the company's financial status and avoid entering into transactions that are in breach of his/her fiduciary duties as director, especially when the company's solvency is open to question.

最高人民法院於2020年3月31日發佈全國法院服務保障疫情防控期間復工複產民商事典型案例(第二批)，其中體現了法院在疫情防控期間，進行司法作為，就企業的破產重組、破產清算等案件，通過延長重整計畫執行期、在重整進程中運用託管的方式維持企業的持續運營等方式，體現了法院充分發揮司法職能，積極挽救困境企業，保障破產企業及其債權人的合法利益；為疫情期間醫療防護物資的供給提供了支援，實現了債權人、債務人和社會防控的多方共贏，本文將選取其中兩個典型案例作簡要介紹。

With the economic disruption stemming from the Coronavirus Pandemic affecting enterprises with operations throughout the globe, the spectre of increased cross-border corporate insolvencies has arisen.

Different countries frame the exact description of the role of directors of a company in different terms. One feature is common to all – the obligation not to continue trading if a company is insolvent. Again, the detailed implications of doing so vary from one jurisdiction to another. However, this obligation not to continue wrongful trading is at the heart of trust in a market-based economic system.

The bankruptcy trustee of a bank holding company was not entitled to a consolidated corporate tax refund when a bank subsidiary had incurred losses generating the refund, held the U.S. Court of Appeals for the Tenth Circuit on May 26, 2020. Rodriguez v. FDIC (In re United Western Bancorp, Inc.), 2020 WL 2702425(10th Cir May 26, 2020). On remand from the U.S. Supreme Court, the Tenth Circuit, as directed, applied “Colorado law to resolve” the question of “who owns the federal tax refund.” Id., at *2.

The Federal Court, in the second significant case arising out of the Virgin collapse, has made extraordinary limited recourse and limited liability orders on application by the Administrators.

“As is well known, other than schemes of arrangement, Hong Kong has no legislation that provides for corporate debt restructuring or rehabilitation. This unsatisfactory state of affairs has been the subject of much invariably adverse comment for two decades now. It is brought into unforgiving focus by the economic problems that Covid-19 is causing.

Goulston & Storrs bankruptcy attorney Doug Rosner recently collaborated with Thomson Reuters to create a three-part video series regarding alternative solutions to the financial problems of distressed companies. This summary highlights the key elements to a successful out-of-court restructuring (part two of the series).