The realities of a COVID-19-impacted economy have seen more and more businesses closing their doors. For landlords with commercial tenants, that means the possibility of facing multiple tenants going through bankruptcy proceedings as the ongoing and unpredictable effects of the pandemic come to bear.
Introduction
Part I -- Introduction
COVID-19 and real estate: Germany’s economic situation and the legal framework from a real estate and restructuring perspective.
In the wake of the global financial crisis in 2007-08, distressed real estate yielded generous returns to investors that managed to pick the right cherries at the right times.
Yes, but only if it is done carefully.
All three of these options are procedures intended to secure the most money from the sale for the payment of creditors, and to leave the Seller creditor with no post-closing liability, but the procedure is not set up to provide a Buyer the most protection. However, if you proceed carefully, you can secure the major protections you need, in most circumstances.
Compare these procedures. In a normal contractual sale, a Buyer usually has the following protections:
Auswirkungen für Vermieter und Verpächter
'Chapter 11 bankruptcy', the US insolvency regime, often features in the UK headlines. When Lehman Brothers filed under Chapter 11 in 2008, it marked the start of the global financial crisis. Chapter 11 (which refers to part of the US Bankruptcy Code) is a restructuring tool designed to rescue companies. Its closest UK counterpart is Administration, under Schedule B1 to the Insolvency Act 1986.
In 2015, responding to mounting concerns about pre-pack administration sales, a set of voluntary industry measures were introduced to address the perceived lack of transparency and trust in the process – especially when the sale was to a connected party, like a director or shareholder of the company in administration.
About a year ago the Dutch Court of Appeal* – confirming the decision of the primary relief judge - rendered an interesting judgment in the field of asset recovery. Currently the case is pending before the Supreme Court. Recently the Advocate General rendered its Advisory Opinion in which he advises the Supreme Court to confirm this decision of the Court of Appeal, and also to clarify its case law regarding immunity from execution.
Introduction
Brick and mortar retail businesses, including restaurants, have faced especially difficult challenges during COVID-19. Under the various stay-at-home and shelter-in-place orders that have been issued by state governors, retail stores had no choice but to close for weeks or months. Stores that have been able to reopen are operating at limited capacity due to social distancing guidelines. With either no sales or greatly reduced sales, retail companies have had trouble generating enough revenue to pay rent and many have had to close permanently.