In the best of times, a chapter 11 reorganization is an uncertain and stressful process for all involved. When the disruptive effects of COVID-19 are added to the mix, and many businesses face significant economic difficulties, one can begin to appreciate the daunting task facing bankruptcy courts, debtors, creditors, and their lawyers.
Restructuring
Bankruptcy Impact on Employee Benefit Plans
As some companies experience financial hardship as a consequence of the Covid-19 pandemic, bankruptcy filings under Chapter 11 of the U.S. Bankruptcy Code are on the rise. Companies looking to restructure and streamline costs in the bankruptcy process often look to employee benefit plans as one area for change.
This article broadly addresses the impact…
Managing Health & Welfare Plans During Restructuring
Employers across the country are restructuring business operations to mitigate the continuing impact of the Covid-19 pandemic. Restructuring business operations—whether by complete shutdown, sale, or bankruptcy—implicates several employer-sponsored health and welfare plan issues. This article provides a high-level overview of common health and welfare plan scenarios that plan sponsors may encounter during a restructuring.
Structured Preferred Equity – A Versatile Tool in the Debt Restructuring Toolbox
By proskauer
For many sponsor-backed and other highly leveraged private companies, the business impact of COVID-19 is just beginning to apply pressure to financial covenant compliance. As borrowers and private credit (or other) lenders think through options on how best to address pending or anticipated defaults, structured preferred equity should be considered as a versatile tool in…
Corporate Insolvency and Governance Bill: Behind the Detail
Further to our last update on prospective changes to the UK insolvency regime in light of COVID-19, the UK government revealed the Corporate Insolvency and Governance Bill on 20 May. The Bill follows the lead of several other jurisdictions including the Netherlands, Hong Kong, Spain, Australia and Germany in introducing such emergency measures and includes…
General Duties of Directors Remain Despite Proposed Relaxation of Wrongful Trading Laws
Further to our update to the existing insolvency laws, whilst it appears from the recent government announcement that UK wrongful trading provisions may be retrospectively relaxed from 1 March for a three month period, directors should continue to have regard to their individual conduct, particularly given the increase of claims funded by the growing litigation…
Proposed Changes to UK Insolvency Laws in Response to COVID-19
By proskauer
The UK Government has announced changes to the existing UK insolvency laws in order to ease pressure on companies and give them breathing space to trade through the COVID-19 pandemic. Exact timing for implementation of the changes is not clear and Parliament is in recess until 21 April 2020 but the changes will be amended…