Restructure your UK Business Post-COVID-19?

Working during isolation periodThe UK government has released its recovery strategy dealing with how the UK might move from lockdown to the “ new normal”  enabling some businesses to re-open. The ability to begin rejuvenating businesses that have been mothballed for the past couple of months is good news but corporates should proceed with caution as they take steps to revamp the workplace. Those businesses that are still restricted from opening (largely those in hospitality and leisure) will have consider whether the business can survive an extended period of lockdown or whether it is appropriate to consider restructuring the business.

Our quick guide sets out the key considerations for all businesses thinking about restructure, rejuvenate or mothball options as we unlock.

Our quick guide also provides access to a number of tools, guides and blogs to support our clients with all their financial health needs whether they be focused on workforce, supply chain, cashflow, Directors Duties or ongoing contractual obligations.

Walking the Tightrope of Wrongful Trading: Temporary “Suspension” of Liability in the UK Corporate Insolvency and Governance Bill

On 20 May 2020, the UK Government introduced the Corporate Insolvency and Governance Bill (the “Bill”)  to the House of Commons. The aim of the Bill was temporarily to amend corporate insolvency laws to give companies the best possible chance of weathering the storm of the COVID-19 pandemic.

One of the significant measures can be found at clause 10 of the Bill. This is the temporary relaxation/suspension of liability for wrongful trading under sections 214 and 246ZB of the Insolvency Act 1986. The intention of this measure is to allow directors to ensure that their businesses continue through the COVID-19 pandemic without fear of personal liability for wrongful trading. However, wide drafting may have raised as many questions as the answers it provides.

This blog will focus on wrongful trading. A broader overview of the measures introduced by the Bill can be found here. Continue Reading

UPDATED Global Insolvency Report: Impact of Covid-19 on Insolvency Laws

As different countries respond in different ways to meet the challenges placed on businesses and the economy.  Our guide sets out how different jurisdictions are changing their Insolvency Laws to help alleviate additional pressures placed on businesses as a consequence of cash flow pressures caused by COVID-19.

We have updated our guide to include further changes to insolvency laws in the UK, Belgium and Japan.

UPDATED: How to Access European and Middle Eastern Governments’ Financial Support Packages

Save your Sterling concept high quality and high resolution studio shootWe have updated our European & Middle Eastern Government Financial Support guide, which sets out what financial support businesses in different jurisdictions could access to help manage financial distress caused by Covid-19.  We have updated this with new details for the Czech Republic, Belgium, Germany, Italy, Poland, Saudi Arabia, Slovakia and France.

To access the updated guide – click here.

Webinar Recording: COVID-19 Relief Funding & Reopening America – What Is Really Happening in Congress and What Are the Risks and Rewards of Resurrecting the US Economy?

On Thursday, May 21, 2020, the American Bankruptcy Institute (ABI) hosted a webinar, featuring a distinguished panel of professionals, including former Speaker of the US House of Representatives John Boehner, as well as the current senior US Senator from West Virginia, Joe Manchin, who shared their thoughts on how best to safely and gradually re-open business across America.

In addition, they provided first-hand insight and guidance regarding the existing stabilization programs (e.g., CARES Act, Main Street Lending, PPP), the important role that US Treasury is playing during the pandemic, and the most recent flurry of funding initiatives, including the US$3 trillion HEROES Act, proposed in Congress in an effort to manage the far reaching effects of the COVID-19 crisis.

Our panel was moderated by Stephen Lerner, Squire Patton Boggs, Cincinnati, Ohio.

recording of this webinar is available online.

UK Government publishes bill outlining temporary restrictions on use of statutory demands and winding up petitions

The highly anticipated Corporate Insolvency and Governance Bill (the “Bill”) was introduced to the House of Commons yesterday on 20 May 2020. Its aims appear to be simple: safeguard companies and maximise their chances of survival thereby preserving jobs.

Alongside many key measures, the Bill includes temporary provisions to restrict the use of statutory demands and winding up petitions. Perhaps the headline provision relating to winding up petitions issued against companies during the pandemic is that the court will not make a winding up order on such petitions unless it is satisfied that the debt is unpaid for reasons unrelated to COVID-19.

Alongside this blog, we have produced a general overview of the Bill which can be found here. Continue Reading

New UK Insolvency Laws offers support for businesses struggling with cash flow, but what else can lenders and others expect?

The UK Government published the Corporate Governance and Insolvency Bill on 20 May 2020. The legislation will be fast tracked and include both temporary and permanent changes to the UK insolvency legislation.

The temporary measures, aimed at supporting businesses struggling with cash flow and facing distress due to COVID-19, include prohibitions on presentation of winding up petitions and winding up orders, suspension of wrongful trading laws and the ability to apply for a moratorium.

Continue Reading

Has your business assessed whether it can un-lock? The results from our UK on-line tool suggest many have not

Keys and PadlockOur new on line “Unlocking the Lockdown” tool looks at the next steps that may need to be considered by businesses across the UK as the country slowly navigates out of lockdown. As of 18 May 2020, our team has communicated with over 200 businesses to see what their next steps are and have concluded their initial findings for the following areas:

  • Financial Health and Support;
  • Supply Chain;
  • Workforce and Employment Law;
  • Pensions;
  • Health and Safety and
  • Tax and Company Law Requirements.

Our initial results have uncovered that just under 50% of businesses have not considered the impact of any subsequent lockdown. Although it appears that the UK Government is moving forward with unlocking the nation, a fear of a second wave of infections and the financial implications it would bring, need to be carefully considered by every business.

Continue Reading

Changes to CLBILS and CCFF will provide more funds to UK Businesses to assist cash flow

Cash FlowFollowing changes announced to the CLBILS and CCFF please see our updated UK government financial support guide.

Perhaps most notably borrowers under CLBILS will be able to borrow up to 25% of turnover (up to a maximum of £200 million).  The changes  help ensure large firms which do not qualify for the CCFF have enough finance to meet cashflow needs during COVID-19.  However there are new conditions and restrictions that apply to the scheme.


German Federal Government Announce Start-Up Financing Program

The German Federal Government has launched a series of assistance packages of measures for business against the consequences of the COVID-19 pandemic. In particular, the German Government is of the opinion that start-ups and young technology companies are particularly important for the German economy. See our alert for further details about the new measures.