A recent ruling by Judge Glenn in the Bankruptcy Court for the Southern District of New York shows that notwithstanding the U.S. Supreme Court’s In re Jevic decision,[1] structured dismissals of chapter 11 cases are still permissible and in some instances more beneficial to creditors than confirmation of a plan or conversion to a chapter 7 liquidation.
The members of our Restructuring & Insolvency Group have finalized their 2020 edition of the Bankruptcy, Insolvency & Rehabilitation Proceedings Guide, which can be found here.
Insolvency of companies in Portugal – Liability of directors and managers article can be read here.
One thing that hasn’t changed since the COVID-19 crisis hit? Directors and officers of corporations still have the same fiduciary duties that they had before the pandemic. What COVID‑19 has changed is what constitutes due care, and the impact of this is likely to be broadened by an enlargement of the parties who should be considered as fiduciary duties are discharged.
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Perhaps no credit market is as much a bellwether for the economic crisis caused by the COVID-19 pandemic than commercial mortgage-backed securities (CMBS). While the impact of relief programs on consumer-based markets remains to be seen, CMBS offers a broad view into the health of consumers, vulnerable industries, the success of stimulus programs on small and medium-sized businesses and the overall economy. Deals in the pipeline may be in jeopardy as parties re-evaluate their positions and consider the outlook for commercial tenants in vulnerable areas, such as hospitality and retail. Meanwhile, performance of existing deals may be impacted by commercial tenant insolvencies and suspensions of bankruptcy proceedings. Read more…
At the beginning of the month Russian regulators implemented a draft law, which provides for the possibility of the Government of the Russian Federation by its act to introduce a moratorium on initiation of bankruptcy proceedings under natural and man-made emergencies, significant changes in the ruble exchange rate and similar exceptional circumstances (for more details see the update). The moratorium on bankruptcy has been in force in Russia since April 4, but now the Law on Bankruptcy is being corrected again. The need for amendments is due to the rushed adoption of the Law, as well as the reaction to criticism from the professional community The law providing for the amendment was signed by the President of the Russian Federation and comes into force on April 24. In particular, the new law establishes the following changes to the regime of the moratorium on bankruptcy.
The Government’s decision is motivated by the fact that, giving birth to an instrument never tested before and studied to face, originally, only “ordinary” crises, could be, in this period of emergency, inappropriate.
Marketplace lending took root in the shadow of the last financial crisis. Now, the question for consumers, businesses and marketplace lenders (MPLs) alike, is whether the conditions are right for it to thrive in the wake of the coronavirus and what may be the “deepest recession on record.”
No doubt, cash-strapped consumers and small businesses will want to turn to nonbank lenders, such as MPLs and other fintech companies, for funding. MPLs may even be able to provide those loans through the recently announced Paycheck Protection Program (PPP) of the “Coronavirus Aid, Relief and Economic Security Act” (CARES Act). But there are hurdles this time around in what is currently an economic, rather than financial, crisis. Investors already seem to recognize this, as publicly traded MPLs continue to trade at or near all-time lows. Read more…
Thousands of businesses across the country are looking at months of extended business distress due to the spread of COVID-19, and many companies are reevaluating their books and accounts receivable to determine cash flow issues. Given the unknown amount of time until business resumes as usual, your company may want to consider the following when planning for cash flow issues and determining strategies for orders and collections in the coming months. READ MORE