Earlier this month, a Wolverhampton-based financial advisor was banned by the Insolvency Service for eight years after his firm provided poor pension investment advice, resulting in clients losing £7 million.

Background

Directors' Duties and Related Matters, in the Context of COVID-19

Updated: 02 April 2020

Scope And Purpose of This Note

This note summarises the duties that directors of companies incorporated in England and Wales are subject to.

This note explains those duties, and matters that directors should consider in relation to those duties, in the context of the developing coronavirus disease 2019 (COVID-19), commonly known as the "coronavirus" or simply, COVID-19, pandemic.

On the evening of Monday 23 March, 2020, the Australian Federal Government passed a broad range of stimulus measures under the Coronavirus Economic Response Package that is said to come into force immediately. The Coronavirus Economic Response Package is a temporary (six-month) relief package to combat the economic impacts of the coronavirus disease 2019 (COVID-19) outbreak and to provide public health measures to prevent its spread.

We are in unprecedented times. The current COVID-19 pandemic will not only have an impact on the physical health of our country, but the economic health of our country as well. Increased bankruptcy filings are a virtually certainty and this raises concerns of many, including licensors and licensees of intellectual property. What should these parties be thinking about given the coming uptick in bankruptcies?

From the Licensee’s Perspective

Over the weekend, the Business Secretary announced that UK Insolvency Laws will be changed.

The changes will give businesses “extra time to weather the storm” and give comfort to directors who, challenged with trading through a difficult cash flow period, will not face claims for wrongful trading.

Relaxation of wrongful trading provisions

The proposed measures alleviate concerns that borrowing additional funds offered by the Government could place a director at risk of personal liability.

In the past several years, the United States has seen a tidal wave of retail sector chapter 11 cases. The end result for most of those cases has been going out of business and liquidation sales. On March 11, 2020, Modell’s Sporting Goods commenced its chapter 11 cases seeking to follow a similar path taken by other retailers by closing all 153 sporting goods stores in a controlled liquidation. Unfortunately for Modell’s, the COVID-19 crisis hit the United States just as Modell’s commenced its liquidation.

On March 26, 2020, the Senate approved a roughly $2 trillion stimulus package—the biggest economic stimulus in recent U.S. history—in response to the COVID-19 pandemic. This economic relief provides expanded protections for American families, workers, and businesses affected by the public health and economic crisis.

The key measures included in the package are:

The ILA Technical Committee, in conjunction with the CLLS, has produced the attached briefing note that reminds practitioners and businesses of the flexibility of a UK administration to stabilise, protect, and, if necessary, restructure companies.

With respect to the dynamic course of events regarding the coronavirus disease 2019 (COVID-19), commonly known as the "coronavirus", we address the threat of insolvency of Polish companies and related liability of the statutory bodies (management board members), and provide a list of practical mitigating steps.

Insolvency Test of Your Company

Pursuant to the Polish bankruptcy law, the company is insolvent if: a. It is not able to pay its liabilities when they fall due and if the

On March 23, 2020, the German Federal Government (Bundesregierung) published a draft bill to mitigate the consequences of the COVID-19 in civil, insolvency and criminal procedural law.