Zone of Insolvency

Latest from Zone of Insolvency

August 21, 2020

On 30 July 2020 Singapore’s new “omnibus” Insolvency, Restructuring and Dissolution Act 2018 (the Insolvency Act) came into effect. This marks the third phase in recent years to strengthen Singapore’s restructuring and insolvency laws. The Insolvency Act consolidates the laws on insolvency, bankruptcy, restructuring and dissolution into a single enactment and introduces a number of changes to the restructuring and insolvency framework in Singapore including: (i) the introduction of a new licencing and regulatory regime…

Zone of Insolvency

Modernising business registers and director identification numbers

By Natasha Toholka (AU) & Deborah Tsai (AU)

July 22, 2020

A package of five legislative reforms — Commonwealth Registers Bill 2019, Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019, Business Names Registration (Fees) Amendment (Registries Modernisation) Bill 2019, Corporations (Fees) Amendment (Registries Modernisation) Bill 2019, and National Consumer Credit Protection (Fees) Amendment (Registries Modernisation) Bill 2019 — received royal assent on 23 June 2020. These amendments introduce significant changes to the management of Australian business information by Commonwealth bodies, and improve regulation of…

Zone of Insolvency

Directors Can Stop the Zombie Company Pandemic

By Scott Atkins (AU) & Dr. Kai Luck (AU)

May 25, 2020

In the article, “Will the real zombie please stand up? The opportunity for directors to take control,” Scott Atkins and Dr Kai Luck continue their analysis of the risk that global fiscal stimulus and support measures in response to COVID-19 will be used by some entities to continue trade even when they have no realistic prospect of long-term profitability. There are personal liability laws for directors that should now provide directors with an incentive to…

Zone of Insolvency

VIDEO – Use of schemes as UK debt restructuring tools

By Matthew Thorn (UK), Mark Craggs (UK) & Grace Carpenter (UK)

May 22, 2020

Our video, Use of schemes as UK debt restructuring tools, provides insight into the circumstances in which schemes can be used in restructuring transactions where there are minority hold-out creditors and it is not possible to reach unanimous (or near-unanimous) approval thresholds for desired amendments to the finance documents and/or the capital structure.…

Zone of Insolvency

The new pandemic: Zombie companies will eat Australia’s COVID-19 economic recovery

By Scott Atkins (AU) & Dr. Kai Luck (AU)

May 21, 2020

In this article, Scott Atkins and Dr Kai Luck consider how the extraordinary government fiscal and stimulus measures introduced in response to COVID-19 may provide an incentive for so-called zombie companies—those that were facing endemic operational and liquidity issues pre-crisis and that have no realistic prospect of successful trade in the long-term—to continue on for the next 6 to 12 months, preventing the recycling of important capital needed to reinvest in the innovative new business…

Zone of Insolvency

COVID-19: From black swan to boiling frog

By Scott Atkins (AU) & Dr. Kai Luck (AU)

May 20, 2020

Scott Atkins and Dr Kai Luck examine in this article how underlying corporate governance and risk failures may have contributed to boards being caught so off-guard by COVID-19 and how COVID-19 ‘tunnel vision’ (focused only on pandemic-related business continuity and risk management plans) may lead to companies being exposed to equally devastating risks in other contexts—including climate change and cybersecurity—as the economic recovery period commences across the globe.…

Zone of Insolvency

The shift we needed: The fight to save Virgin already changing corporate rescue laws in Australia

By Scott Atkins (AU) & Dr. Kai Luck (AU)

May 19, 2020

In this article, Scott Atkins and Dr Kai Luck look at the important role Australian courts can play in creating a stronger corporate and business rescue culture to help financially distressed but long-term viable entities navigate the economic downturn caused by COVID-19. Since this article was written, the Federal Court of Australia granted further orders on 13 and 15 May 2020 exempting the voluntary administrators from personal liability for new contracts entered into as they…

Zone of Insolvency

Don’t panic this pandemic: new safe harbours for directors in COVID-19

By Natasha Toholka (AU) & Deborah Tsai (AU)

May 15, 2020

In recognition of the significant economic impact of COVID-19, several jurisdictions have passed (or propose to pass) legislation to provide temporary relief for directors of businesses in financial distress, and hopefully mitigate some of the economic effects of the COVID-19 pandemic. Australia Relevant Act: Coronavirus Economic Response Package Omnibus Act 2020 (Cth) Length of Grace Period: 6 months from 25 March 2020 (unless extended by legislative instrument) The minimum debt which can form the basis…

Zone of Insolvency

Global financial response to the COVID-19 crisis

By Howard Seife (US)

April 8, 2020

We have launched our interactive cross-border guide to the financial support on offer to businesses during the COVID-19 crisis and considerations for banks, corporates and directors trading through the turmoil. We also look at some of the issues being considered in the lending market as well as changes in insolvency law, reviewable transactions and tips for good governance of distressed companies. Hopefully this guide will be of assistance to global operators looking to compare and…

Zone of Insolvency

UK Update: Foreign solvent proceedings not recognised in England under the UNCITRAL model law (as enacted)

By Matthew Thorn (UK) & Joseph McHale (UK)

February 21, 2020

Introduction In Carter v Bailey and Hutchinson (as foreign representatives of Sturgeon Central Asia Balanced Fund Ltd) [2020] EWHC 123 (Ch), the English High Court found that a foreign solvent liquidation could not be recognised under the Cross-Border Insolvency Regulations 2006 (CBIR) (which enacted the UNCITRAL Model Law on Cross-Border Insolvency in Great Britain). Accordingly, the court terminated the recognition order granted previously. Key points to note It was held to be contrary to the…

Zone of Insolvency

Blog Authors

The Insolvency, Restructuring and Dissolution Act 2018 – Reforming the law on contractual remedies

Modernising business registers and director identification numbers

Directors Can Stop the Zombie Company Pandemic

VIDEO – Use of schemes as UK debt restructuring tools

The new pandemic: Zombie companies will eat Australia’s COVID-19 economic recovery

COVID-19: From black swan to boiling frog

The shift we needed: The fight to save Virgin already changing corporate rescue laws in Australia

Don’t panic this pandemic: new safe harbours for directors in COVID-19

Global financial response to the COVID-19 crisis

UK Update: Foreign solvent proceedings not recognised in England under the UNCITRAL model law (as enacted)

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