Tag Archives: corporate law

ILN Today Post

Rewards and Risks for Distressed Strategic Middle Market M&A

During the bull market that followed the recovery from the 2008 financial crisis, we saw robust and sustained merger and acquisition (M&A) activity. Acquisitive companies pursued target businesses with strong balance sheets and bright growth prospects. Acquirers and targets became accustomed to broad rules of the road that guided M&A valuation, structure and process and informed transaction risk and reward. The coronavirus pandemic and its resulting economic dislocation will upend many of those rules. Read more…

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Can Every Breach or Non-Performance be Justified or Excused on Invocation of COVID-19 as a Force Majeure: Delhi High Court Verdict

COVID-19 has caused tremendous economic loss, delays in project completion, missing of targets and milestones and potential breaches and disputes among contracting parties. Recently, in the matter of Halliburton Offshore Services Inc. vs Vedanta Limited & Anr. [O.M.P (I) (COMM.) No. 88/2020 & I.As. 3696-3697/2020], a petition seeking inter alia restrain on invocation of the bank guarantees issued in favour of the Respondent, the Hon’ble High Court of Delhi considered the issue of invocation of COVID-19 as a Force Majeure condition and held that “Every breach or non-performance cannot be justified or excused merely on the invocation of COVID-19 as a Force Majeure condition”. The Court further observed that it would have to take into consideration various factors to assess whether a party is genuinely prevented or justified in its non-performance due to the epidemic/pandemic.

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MSME definition further revised by Union Cabinet

Subsequent to the revisions made in the definition of MSMEs during the INR 20 lakh crores economic package announcement made in May 2020, the government on Monday i.e. 01st June 2020 further revised the definition of MSMEs.
From now on, enterprises with investments up to INR 50 crore with a turnover of less than INR 250 crore will now be defined as ‘medium’ units. Whereas under the economic stimulus package, the revised definition for medium enterprises was kept at a turnover of INR 100 crore and investment up to INR 20 crores. Below is the tabular representation of the definition of MSMEs classification:
Micro Enterprises
Enterprises with an investment less than INR 1 crore and turnover less than INR 5 crore turnover
Small Enterprises
Enterprises with an investment less than INR 10 crore and turnover less than INR 50 crore turnover
Medium Enterprises
Enterprises with an investment less than INR 50 crore and turnover less than INR 250 crore turnover
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ILN Today Post

Key takeaways from the Economic Package announced by Union FM

Prime Minister Shri Narendra Modi announced Rs 20 lakh crore fiscal stimulus equivalent to 10 per cent of India’s GDP to deal with COVID-19 situation in the country, the Union Finance Minister Nirmala Sitharaman announced the following changes in the various other sectors to promote the motto of Self Reliant India and boost the economic status of the Country.

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General considerations regarding Coronavirus (COVID-19) consequences on contracts under Mexican legislation.

Due to the crisis caused by COVID-19 and the different decrees and resolutions issued in connection thereto by the Mexican Federal Government, many doubts and questions have emerged regarding the effects this will have on contractual relationships among individuals.

Listed below are some relevant legal considerations regarding the enforceability of contractual obligations:

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Federal Reserve announces creation of Main Street Lending Program

The Federal Reserve has announced the creation of the Main Street Lending Program. The Program is intended to assist smaller and medium-sized businesses that were sound financially before the COVID-19 pandemic and that need financing alternatives. Businesses that were unable to access Payroll Protection Program (PPP) funding or require additional funding after receiving a PPP loan may also access the Program.
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Gradual Resumption of Business Activity in Quebec

By Nicolas Pfister, from our Insurance Law Practice Group

A long-awaited moment has arrived, with the resumption of economic activity in certain sectors of activity considered non-essential. The Quebec Government’s policy is one of caution, and it is proposing a gradual opening plan that will be spread out over the summer. We wish to mention at the outset that this plan is subject to revision if the sanitary situation in Quebec is no longer under control.

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Force Majeure Event – Injunction Against Invocation of a Bank Guarantee During Lockdown

Judgment: M/s Halliburton Offshore Services Inc. Vs. Vedanta Limited & Anr. [O.M.P. (I) (COMM) 88/2020 & I.A. 3697/2020]

Forum: Hon’ble High Court of Delhi (“Court”)

Judgment delivered on: April 20, 2020

Act/Law: Arbitration and Conciliation Act, 1996 (“Act”).

Ratio: Special equities in order to prevent irretrievable harm or injustice is a ground for injuncting invocation/encashment of bank guarantee.

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Postponement of Business Declarations Until September 2020

By Sharon G. Druker, from our Business Law Practice Group

April 30, 2020 — Federal corporations, non-profit organizations and cooperatives generally must file their annual returns and pay the annual fees within 60 days of the anniversary date of their creation. However, Corporations Canada has recently announced that all such entities whose anniversary date falls between February 1 and June 1, 2020 now have until September 30, 2020 to do so. Corporations created under a special act of Parliament and which would otherwise have to file between April 1 and June 1, 2020 now also have until September 30, 2020 to do so.

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Companies May Hold Remote Meetings, Despite Governing Documents

By Sharon G. Druker, from our Business Law Practice Group

April 29, 2020 — By press release dated April 27, 2020, the Minister of Justice and Attorney General of Québec announced that for the duration of the COVID-19 public health emergency, legal persons who must hold meetings of their boards of directors, shareholders (in the case of a corporation) and members (in the case of non-profit organizations) can do so remotely, even if their governing documents require in-person attendance or actually prohibit participation in meetings by technological means. This includes corporations, non-profit legal persons governed by Part III of the Companies Act (Quebec), cooperatives (for both annual and special meetings), partnerships, syndicates of co-owners, professional orders, the council of commissioners of a school board and the governing board of an elementary or high school.

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