Insolvency & Bankruptcy

Adamus, Rafał, ‘Simplified Restructuring Proceedings in Poland as an Example of Anti – Crisis Regulation Due to the COVID-19 Pandemic’ (2020) 20(1) International and Comparative Law Review 293–303
Abstract: The study discusses new legislative anti – crisis solutions adopted in Poland in connection with the COVID – 19 pandemic. The Polish legislator decided to introduce the so-called simplified restructuring procedure. This happened in the face of the expectations of both the jurisprudence of law and practice. On the one hand, the simplified restructuring procedure (the fifth independent type of restructuring procedure for an entrepreneur in Poland) allows for a quick, cheap and simplified conclusion of an arrangement with creditors outside the court, then approved by the court. On the other hand, the opening of such proceedings gives the debtor protection against enforcement at the creditor‘s request and against bankruptcy at the creditor‘s request. This procedure can be a testing ground for the concept of informalisation and acceleration of restructuring procedures.

Arnold, Kim, ‘Holding DOCAs in the Context of COVID-19’ (2020) 32(2) Australian Restructuring Insolvency & Turnaround Association Journal 13
Abstract: Since the financial impact of the COVID-19 pandemic began to increase there have been many discussions around potential options for businesses to protect themselves and restructure.

Athota, Shreeja, ‘Reverting Back: A Critical Analysis of the Insolvency and Bankruptcy Code’ (SSRN Scholarly Paper ID 3710944, 13 September 2020)
Abstract: The Insolvency and Bankruptcy Code was enacted in 2016 with an intention to consolidate the existing framework by creating a single law for insolvency and bankruptcy. It may be noted that one if the major objectives of the Code is to protect the interests of the creditors. The Code sought to remedy the various ‘illnesses’ suffered by the insolvency laws in the previous regime by shifting away from the debtor-in-possession model, prevalent in the previous regime, to the one where both the creditors and the debtors operate within a framework of equity and fairness to all stakeholders to preserve the value of the Company. However, the Code was not perfect by all means, it is still a work under progress. Furthermore, in light of the COVID-19 pandemic, the government has shifted its focus to protecting the interests of the businesses. Although, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 seems have promulgated with the intention of protecting companies and promoters from no fault liability due to the COVID-19 pandemic, the ambiguities in the legislation seem to raise more questions than answers. In fact, the recent ordinance seems to indicate a transition to the earlier model which was detrimental to the interests of the creditors. Therefore, this essay seeks to address analyze the issues and ambiguities with specific reference to the 2020 Ordinance.

Atkins, Scott and Kai Luck, ‘Legal Update: Corporate and Business Rescue in a COVID-19 World’ (2020) 32(2) Australian Restructuring Insolvency & Turnaround Association Journal 16–21
Abstract: Executive power, court intervention and the opportunity for meaningful law reform to the voluntary administration regime.

Austin, Daniel A and Yu Huan, ‘Bankruptcy in the Time of COVID-19: Special Measures Adopted by the People’s Republic of China Courts During the Period of COVID-19 Prevention and Control’ (2021) International Insolvency Review 1-15 (pre-print, published online 27 September 2021)
Abstract: Business bankruptcy in China is governed by the Enterprise Bankruptcy Law (EBL), a national insolvency code enacted in 2007. The EBL contains provisions for business liquidation, reorganization, and compromise of debt. Although adjustment of debt through bankruptcy is far less common in China than in western nations, Chinese courts have established a body of bankruptcy procedures and judicial interpretations that give insolvency in China a measure of predictability and effectiveness. Notwithstanding the EBL provisions, soon after the onset of the pandemic, PRC courts began to adopt ad-hoc rules and guidelines in bankruptcy cases for businesses whose financial woes were caused or exacerbated by coronavirus, or for enterprises that produced medical equipment and supplies to help prevent and control the virus. This paper examines these court measures, explores their political and judicial context, and demonstrates how they produced bankruptcy outcomes that were often significantly different than what would have resulted if the EBL had been applied based on pre-COVID-19 EBL practices.

Bailey, Diggory, ‘Judicial Anticipation of Legislation’ [2020] Statute Law Review Article hmaa014 (advance article, published 5 August 2020)
Abstract: This note considers Re: A Company (Injunction to Restrain Presentation of Petition) [2020] EWHC 1406 (Ch) and Travelodge Ltd v. Prime Aesthetics Ltd [2020] EWHC 1217 (Ch) in the context of earlier case law and looks at the circumstances in which the courts have shown a willingness to have regard to the likelihood of future legislation. Note: the litigation concerns a press release by the Secretary of State for Business, Energy and Industrial Strategy on 23 April 2020 which announced certain proposals designed to mitigate the effects of the Covid-19 pandemic on businesses and the economy. The legislation in question is the Corporate Insolvency and Governance Bill (‘the Bill’) was introduced into the House of Commons on 20 May 2020.

Bangha-Szabo, Attila and Anthony Morton, ‘Germany: Restructing Update’ (2020) 35(7) Journal of International Banking & Financial Law 511–512
Abstract: Reviews changes to German business restructuring procedures under IDW S6 during the coronavirus pandemic and the temporary relaxation of specific insolvency laws. Outlines the role and scope of IDW S6, its uses in risk mitigation, its acceptance as proof as to the merits in restructuring proceedings by the tax authorities, and the issues which an IDW S6 restructuring report must cover.

Ben-Ishai, Stephanie, ‘Consumer Bankruptcy in the Wake of COVID-19: The Calm Before the Storm’ (2021) 57(3) Osgoode Hall Law Journal 637–664
Abstract: The crisis created by the spread of COVID-19 seems likely to permanently change the structure of economic activity moving forward—more people are working from home, taking fewer business trips, and gravitating towards online spending. In the short-term, Canada has done well to provide temporary economic support to those temporarily or permanently affected by the virus. This unprecedented level of government support, together with the unparalleled level of voluntary creditor forbearance for late payments, has led to a remarkable drop in consumer bankruptcy filings in April and May 2020. However, a significant surge in the need for debt relief and bankruptcy filings is predicted for the near future. This article concerns the effect of COVID-19 on the household debt carried by Canadian families and on the debt relief measures that are available to them. How, if at all, will the socio-economic composition of those with serious debt problems change? Are the debt relief measures currently available through the Bankruptcy and Insolvency Act adequate to the task? What changes to the system of credit regulation might help those affected by the virus?

Bermejo, Nuria, ‘Corporate Restructuring Laws Under Stress. The Case of Spain’ (2023) 24(2) European Business Organization Law Review 337–348
Abstract: This paper offers some reflections on the effectiveness of the insolvency law measures adopted in Spain during the Covid crisis and on the provision of public funding during this crisis and the repayment of the corresponding claims. The analysis shows that the insolvency measures were inherently ill-suited for achieving the policy goal of preserving businesses, and that there was a good case for the provision of public funding. However, in the Spanish case this funding came too late, and there are now significant challenges associated with restructuring these funds where they were extended by way of loan or guarantee rather than as grant. With regard to the recovery of these funds, the paper concludes that there are no good reasons to insulate the State from the restructuring of debtors’ liabilities in the context of a crisis with the characteristics of the pandemic crisis. On the contrary, credit risk should also be transferred to the State—as to other creditors—, and the State will then have to assume the role of loss absorber of last resort.

Bodul, Dejan, ‘Redefining the Classic Concept of the Court?: Responses to the Corporate Solvency Problem in the Ongoing Covid-19 Crisis’ (2021) 5(EU 2021 – The Future of the EU in and After the Pandemic) EU and Comparative Law Issues and Challenges Series (ECLIC) 444–467
Jurisdiction: Croatia
Abstract: The coronavirus pandemic is pushing large number of firms towards insolvency by dramatically changing consumption patterns and business operations. The first wave of liquidity-focused policy responses (Act on Intervention Measures in Enforcement and Insolvency Proceedings for Duration of Special Circumstances) prevented or delayed more severe consequences for the corporate sector. While some liquidity support is still needed, the crucial issue that must be tackled now is that of corporate solvency. This paper addresses the role of the Financial Agency (hereinafter: FINA), which, as a legal entity with public authority, has (in)appropriate legal authority in bankruptcy proceedings over the rights of entities. As in the previous paper, a multidisciplinary scientific approach is advocated, which should contribute to the consideration of various aspects of the relationship between FINA, the state, the judiciary and the current tendency of Dejudicijalization.

Bradley, Christopher G, ‘The New Small Business Bankruptcy Game: Strategies for Creditors Under the Small Business Reorganization Act’ (2020) 28 American Bankruptcy Institute Law Review 47
Abstract: In late 2019, Congress enacted the Small Business Reorganizations Act. The Act’s timing is fortuitous: Weeks after it went into force in February, 2020, the Covid-19 pandemic damaged countless small businesses—enterprises that the Act may provide an opportunity to save. The Act provides businesses with powerful options to reorganize under a new ‘subchapter V’ of Chapter 11 of the Bankruptcy Code. Subchapter V eases the requirements for confirmation of plans that creditors don’t approve by simply requiring debtors to project their ‘disposable income’ and pay it to creditors for three to five years; provides incentives for the parties to reach agreement on reorganization plans; lowers the debtor’s disclosure obligations; eliminates the regular appointment of an official committee of creditors; requires the appointment of a trustee to aid in plan negotiations; and permits modification of loans secured by a mortgage on a debtor’s primary residence.Creditors will have to develop a new playbook for subchapter V cases. Most scholarship has emphasized debtors’ new options, but this Article presents an analysis from the perspective of creditors. Of course, creditors are not created equal; strategies will only be useful to creditors with claims substantial enough to justify the investment of time and money. Well-positioned creditors will extract whatever strategic gains they can at the expense of the debtor and of less privileged creditors. The game is multilateral, not simply creditor vs. debtor. The Article suggests strategies for variously positioned creditors to protect their interests.The Article suggests seven major strategies: 1) Creditors should seek influence or control a debtor’s entry into subchapter V by making agreements with debtors concerning the election, using financial maneuvers to work around subchapter V’s debt limits, or challenging the debtor’s eligibility for entry.2) Creditors should monitor and make use of trustees as circumstances warrant, whether by cultivating and working closely with them, by seeking to minimize their role and save expenses, or, at the extreme, by opposing them and seeking their removal. 3) To combat debtors’ tendency to delay, creditors should apply pressure on the debtor by emphasizing the statutory emphasis on speed, scrutinizing the debtor’s required disclosures, and enlisting the trustee and court where possible.4) Creditors should avoid holding general unsecured claims, and, if eligible, should take the election offered by §1111(b) of the Code. 5) Subchapter V places a premium on plans being approved by creditors, so those whose votes are needed for confirmation should extract concessions in exchange for their vote. For those privileged creditors, this should be a major point of leverage.6) Creditors should look to obtain information at every opportunity, including at the required meeting of creditors and status conference early in the case, in the disclosures and filings made by the debtor, and through formal discovery. 7) Creditors extending credit secured by a residence should designing lending practices to ensure that they cannot be ‘modified’ by debtors in bankruptcy. Many of the strategies above will be of keen interest to secured and other privileged classes of creditors. The Article predicts that with these and other strategies in hand, such creditors will not lose much ground under subchapter V. But the law lowers protections for general unsecured creditors, particularly those who remain passive. A number of the strategic tools presented in this Article can aid disfavored general unsecured creditors as well—but frequently, they will have too little at stake to make it worth putting their energy into the new small business bankruptcy game.

Bridge Zoller, Catherine, ‘Corporate Restructuring Laws Under Stress: Policy-Making in Uncertain Times’ (2023) 24(2) European Business Organization Law Review 387–407
Abstract: The economic crisis triggered by the coronavirus pandemic is the most significant global crisis of its kind outside of wartime and the full impacts are still largely unknown. The path to economic recovery is impaired by the war on Ukraine. Many countries have either entered or are about to enter an economic recession. Now that many government support measures have expired or have been exhausted, it is unlikely that they will return at the same level. Many businesses are facing both a liquidity and a solvency crisis. This article considers the impact of these times of crisis and uncertainty on insolvency law-making across over 30 economies where the European Bank for Reconstruction and Development invests. It reflects on arguments raised by Menezes and Lawless in this volume and argues that national legislators should look to insolvency reforms (including in relation to digitalisation) to help their economies recover from recession and the economic shocks of the pandemic and the war on Ukraine, and work to improve the availability of insolvency data. Many international commentators have analysed the global crisis insolvency response from a developed economy perspective. This article focuses on the position in emerging economies, finding that, for a variety of reasons, insolvency was not at the forefront of the national emergency response for many emerging economies during the pandemic. It highlights some of the main deficiencies in insolvency frameworks and makes some suggestions for future policy-making for countries that want to strengthen the overall resilience of their insolvency systems, and financial restructuring processes in particular, to navigate future crises.

Choudhary, Namisha, ‘Law and Pandemic: Commercial Laws Changed in India during Covid-19’ (2021) 1(4) Jus Corpus Law Journal 532–539
Abstract: The research study has been undertaken with the purpose to study the changes in commercial laws in India during Covid-19. The study focuses on the force majeure clause and insolvency laws. The effect of the pandemic on the law has been analysed and how legal disruption was a measure to cope up with the pandemic. The research study also sheds light on the impact of a pandemic on business and how various strategies were undertaken in order to prevent the businesses from shutting down and go down to the edge of insolvency. The research focuses on commercial laws amended because of the loss economy faced during COVID-19 in India. However, examples of the global market and other countries have also been given. COVID-19 was declared a pandemic by WHO on March 11, 2020. A number of areas were affected by the pandemic. The business was one of the areas which faced severe problems and in order to help the firms solve those problems, a way of legal disruption was adopted to change a few commercial laws which helped in preventing the business. The research deals with those changes in laws of change in the commercial sector such as Insolvency Laws and Force Majeure clause. The research has aimed to answer various questions such as the effects of a pandemic on the commercial sector, amendments in the existing laws in order to maintain a balance and provide relief to people, and other measures taken by the government of India to save the business sector to some extent from going into complete insolvency and bankruptcy.

Collins, Daniel M, ‘Insolvency Act 1986 Section 214: A Suspension’ (2020) 31(8) International Company and Commercial Law Review 441–446
Abstract: Discusses the temporary suspension of directors’ personal liability for wrongful trading under the Insolvency Act 1986 s.214 in response to the coronavirus pandemic. Reviews key features of s.214 and the requirements for liability, including the absence of an intention to defraud. Considers whether its suspension was necessary to protect directors, whether it may have a detrimental effect and whether the suspension may need to be extended.

Coneyworth, Amanda, ‘Safe Harbour Advisory in Unchartered Waters Is It Still Relevant?: An Insolvency Practitioner’s Perspective’ (2020) 20(7) Insolvency Law Bulletin 132–134
Abstract: Prior to COVID-19, we saw safe harbour protection under section 588GA of the ‘Corporations Act 2001’ (Cth) as a mechanism for directors to proactively work with their company while it was under

Eidenmüller, Horst, ‘What Can Restructuring Laws Do? Geopolitical Shocks, the New German Restructuring Regime, and the Limits of Restructuring Laws’ (2023) 24(2) European Business Organization Law Review 231–249
Abstract: In this article, I discuss the possibilities and limitations of restructuring laws against the background of geopolitical shocks such as the Covid-19 pandemic and the current energy crisis. I make two claims, one narrow and focused on German bankruptcy law, and one broad with a cross-jurisdictional reach. My narrow claim relates to ‘StaRUG’, the new German restructuring regime. I argue that this law is a superfluous and flawed instrument. It should be repealed. My second claim is much broader. I argue that bankruptcy laws, including restructuring laws, are generally ill-suited to deal with the economic consequences of geopolitical or macroeconomic shocks as a ‘first line of defence’. Bankruptcy laws are not designed to provide the structural assistance at scale which the businesses affected by these shocks need. At the same time, massive state aid for distressed businesses in times of crisis and, in particular, ad hoc bailouts of large critical firms are also problematic. I propose that firms’ resilience against geopolitical or macroeconomic shocks should be strengthened, and that best practices (‘Principles’) for bailouts should be developed.

Ervo, Laura, ‘Insolvency Law and Covid-19: The Finnish Example on Tackling the Pandemic’ in Nadia Mansour and Lorenzo M. Bujosa Vadell (eds), Finance, Law, and the Crisis of COVID-19: An Interdisciplinary Perspective (Springer, 2022) 123–137
Abstract: The Finnish legislature has acted quickly to enact several temporary changes to the country’s insolvency law in the wake of the Covid-19 pandemic. These changes are intended to protect debtors who are suffering financially from the consequences of the pandemic. There are temporary adjustments in bankruptcy legislation as well as in enforcement law. Additionally, there are temporary restrictions on the maximum interest rate and direct marketing of consumer credit. Since the beginning of 2021, the Collection Act has also temporarily contained detailed provisions on the collection costs of non-consumer receivables. The mitigation efforts, made possible by temporary legislation, have already been used actively in the execution of enforcements. Especially applications for grace-free months and relief applications have increased. The legislature has extended the temporary validity of this ‘Covid-19 legislation’ in the different fields of insolvency law already several times.In this article, those temporary changes are introduced and discussed in the Finnish context of insolvency law.

Eszenyi, Thea, ‘ASIC: Impact of COVID-19 - a Regulatory Perspective.’ (2020) 32(2) Australian Restructuring Insolvency & Turnaround Association Journal 48
Abstract: To assist Registered Liquidators (RLs) navigate their obligations during the COVID-19 pandemic, here’s an overview of our current and future insolvency regulatory areas of focus.

Feibelman, Adam, ‘Bankruptcy and the State’ (2022) 38(1) Emory Bankruptcy Developments Journal 1–50
Abstract: Anticipating a wave of bankruptcies caused by the economic and financial effects of the COVID-19 pandemic, numerous commentators proposed measures to expand the institutional capacity of the bankruptcy system. A number of these proposals would represent dramatic and systematic government involvement in the U.S. bankruptcy system. Such involvement by the government in the bankruptcy system sits uneasily with dominant theories of bankruptcy that assume the bankruptcy system should be driven by the interests of direct stakeholders in particular cases. This Article argues that involvement or influence by government actors in the bankruptcy system is, in fact, broadly consistent with bankruptcy theory and with the structural relationship between bankruptcy law and other legal and regulatory components of the state. This relationship is subject to some basic ordering principles. Bankruptcy law constrains and adjusts other legal regimes to some extent, but it generally incorporates non-bankruptcy law and yields to government’s regulatory actions. These ordering principles reasonably extend to ad hoc government actions or ‘activism’ in the bankruptcy system. Thus, government actors generally do not contravene bankruptcy policy when they employ the system to advance non-bankruptcy policies within their authority, even when doing so enables the government to take actions and achieve goals that it could not outside of the system. This Article develops these claims by focusing in particular on the relationship between bankruptcy and financial regulation. Bankruptcy is part of the architecture of financial markets in a modern economy, and the influence of financial regulators on the bankruptcy system should be viewed as the product of overlapping regulatory functions. This Article describes three episodes of regulatory intervention in the bankruptcy system: (1) ‘regulatory bankruptcy’ during the 2008-09 financial crisis; (2) the efforts by the Reserve Bank of India to force some large commercial firms into India’s new insolvency system; and (3) the Chrysler bankruptcy. The ordering principles advanced in this Article generally justify the government involvement in these cases and, to some extent, in the COVID-era proposals as well. However, the degree of regulatory involvement in the bankruptcy system envisioned by some of these recent proposals may be disproportionate to, or attenuated from, their underlying regulatory goals. If so, they may fall beyond the scope of justified government involvement in the bankruptcy system.

Flanagan, John, ‘The Golden Shares Dilemma’ [2022] (5) Illinois Law Review 1971–2002
Abstract: The COVID-19 pandemic brought unprecedented challenges to AThe COVID-19 pandemic brought unprecedented challenges to American businesses. For those businesses facing the most pressure, the American bankruptcy system promised relief and a means of emerging from the crisis. This system is driven by a historic policy of liberal access for debtors, with attempts by creditors to block bankruptcy filings under loan terms routinely nullified. Yet the promise of bankruptcy for some debtors may prove to be illusory, thanks to a device known as the ‘golden share.’ Instead of inserting bankruptcy blocking provisions in loan documents, creditors obtained equity and established their rights to block bankruptcy filings in corporate control documents. While the only appellate court to speak directly on the issue has suggested golden shares are valid, a post-COVID-19 case from the bankruptcy court in Delaware expressed its disapproval of this device. An emerging split of authority threatens to create only more uncertainty for corporate debtors already facing significant pressures. This Note tracks the dilemma of golden shares. It first reviews the history of golden shares, as well as the most important cases dealing with this device. It explores the theory behind the golden shares dilemma, including the role of fiduciary duties in the analysis. The Note then proceeds into a discussion of federal common law. The Note concludes with a proposal that implementing federal common law fiduciary duties through a burden-shifting framework provides the optimal means of resolving the golden shares dilemma.

Fruchter, Steven, ‘Section 363 Sales After the Covid-19 Pandemic’ (2021) 95(2) American Bankruptcy Law Journal 367–388
Abstract: The article explains the necessity for U.S. debtors to provide a virtual attendance option for participating in Bankruptcy Code Section 363 asset auctions during the COVID-19 pandemic and in the post-pandemic world. Topics discussed include the role of the Bankruptcy Act of 1867 as the origin of Section 363, implication of the various standards used by bankruptcy courts to determine asset eligibility for auction under Section 363, and benefit of remote auctions in terms of competitive bidding.

Gattegno, Julie, ‘Tenant Rescue and the Cross-Class Cram-Down’ (2020) 2039 Estates Gazette 54–57
Abstract: Compares the potential impacts on landlords of tenants entering company voluntary arrangements (CVAs) and adopting restructuring plans under the Corporate Insolvency and Governance Act 2020. Considers problems posed by CVAs and outlines grounds on which landlords might challenge them. Looks class composition under restructuring plans and explains the cross-class cram-down, a mechanism similar to that used for US Ch.11 insolvencies.

Ghio, Emilie et al, ‘Harmonising Insolvency Law in the EU: New Thoughts on Old Ideas in the Wake of the COVID-19 Pandemic’ (2021) 30(3) International Insolvency Review (forthcoming)
Abstract: The COVID-19 crisis, which hit the world with full force in 2020, represents one of the greatest health and economic crises in recent history. The pandemic paralysed the world economy, forcing many countries around the globe to take emergency measures. Countries’ emergency responses to the crisis uncovered a tension between the continuous phenomenon of global economic interdependence and the tendency for nation-state governance during the crisis. Although this dichotomy was quite acute in the European Union (EU) at the onset of the pandemic – reflected overall by Member States’ preferences for national solutions over common multilateral solutions – governments eventually converged towards similar responses to the spread of the virus. These responses to the crisis included partial or total isolation of populations, travel bans, and the temporary closure of non-essential businesses. This so-called phenomenon of ‘copycat coronavirus policies’ was the result of regulatory emulation, which occurred spontaneously, with limited direct impetus from the EU. Our paper investigates whether insolvency and restructuring laws, policies, and measures followed a similar pattern. The study focuses on six selected European countries: Denmark, France, Germany, Italy, the Netherlands and the United Kingdom (UK). From a methodological perspective, our contribution relies on a case study approach. Building on the findings of this case study, our paper, then, draws more general conclusions on the process of harmonisation across the EU.

Gore, Kiran Nasir and Charles H Camp, ‘The Interplay Between Insolvency Proceedings and Parallel International Arbitration Proceedings in the Post-Pandemic World’ [2020] The World Financial Review (published online 16 July 2020)
Abstract: As businesses emerge into the post-pandemic world, insolvency proceedings offer practical solutions to businesses aiming to recover from the recent global economic fallout. These businesses hope to repay their debts, restructure and reorganize their assets, and generally manage their operations. While effective, insolvency-based solutions are often designed only to further domestic legal and policy goals and they do not perfectly interact with cross-border business relationships. This article draws upon the authors’ expertise in international dispute resolution to discuss the legal and practical challenges found at the intersection of insolvency proceedings and parallel international arbitration proceedings. These insights provide businesses and their insolvency advisers with a blueprint for managing competing concerns at a sensitive and unpredictable time in a business’s lifecycle.

Gotberg, Brook E, ‘Reluctant to Restructure: Small Businesses, the SERA, and COVID-19’ (2021) 95(3) American Bankruptcy Law Journal 389–442
Abstract: The global pandemic sparged by the proliferation of the COVID-19 virus created an economic crisis of an unprecedented nature in the United States, particularly among small businesses. Many of these small businesses were required by law or circumstances to temporarily close, limit hours or capacity, and!or invest in expensive measures intended to protect the safety of their patrons. The financial consequences of these protective measures were devastating. Fortunately, the law seemed primed for just such a crisis. Mere weeks prior to the national shutdowns caused by the virus, a new bankruptcy law intended to facilitate the reorganization of small businesses went into effect. The Small Business Reorganization Act of 2019 created subchapter V of Chapter 11, which permitted small businesses to reorganize with greater speed and less cost than ever before. In response to the COVID-19 crisis, Congress expanded the use of this provision to a larger number of businesses. However, despite the apparent advantages presented by the bankruptcy law and the economic devastation caused by the pandemic, small businesses declined to file for bankruptcy. Although it is too early to draw definitive conclusions as to why, evidence suggests that small business owners see bankruptcy as a tool of ‘last resort,’ which may neuter the ability of bankruptcy laws to preserve value as intended pursuant to broader bankruptcy policy.

Gurrea-Martínez, Aurelio, ‘Insolvency Law in Times of COVID-19’ (Ibero-American Institute for Law and Finance, Working Paper No 2/2020, 17 April 2020)
Abstract: The international spread of the coronavirus is not only generating dramatic consequences from a social perspective but it is also heavily affecting the global economy. For this reason, governments, financial regulators and international organizations are responding to the coronavirus with a package of legal, economic and financial measures. Among the legal measures included in these packages, many countries, including Australia, Germany, Spain, India, Singapore, Colombia, Portugal, Czech Republic, Russia, New Zealand, the United Kingdom, and the United States, have proposed or implemented temporary changes to their insolvency frameworks. This paper starts by discussing whether using the insolvency system should be the optimal solution to deal with companies affected by the coronavirus. For that purpose, it will analyze the role and limits of insolvency law. It then discusses the most relevant insolvency reforms taking place around the world as a response to the global pandemic, as well as other insolvency and insolvency-related reforms that could be implemented to minimize the harmful economic effects of COVID-19. The paper will conclude by arguing that, even though these responses can provide companies and corporate directors with a valuable breathing space, these reforms need to be accompanied by a more comprehensive package of legal, financial, tax and economic measures to support businesses, employees and the well-functioning of the judicial system.

Iancu, Lavinia-Olivia, ‘The Access Conditions of the Natural Person to the Insolvency Procedure in Romania’ (2022) 8(4) Athens Journal of Law 409–424
Abstract: Since the beginning of 2020 in Romania, the COVID-19 pandemic has been exhibiting its negative effects. As expected, the hardest hit were the ordinary citizens who, overnight, awakened to reduced wages or downright joblessness. Moreover, the year 2021 has brought price increases in all areas, from basic foodstuffs to electricity, gas, fuels. The over-indebtedness of a large population of individuals has become the norm under the above conditions. The insolvency proceedings law for individuals seemed to be a solution for their over-indebtedness predicament, but we have found that this law is not performing at its true potential. In addition to a complex application form requested of the simple citizen, we contend that the access conditions to the insolvency procedure of the natural persons can be simplified and improved. Given the economic conditions in Romania, along with the reduction in the living standard, the legislator will have to give priority to the possible legislative solutions that will offer the indebted a fresh start.

Iancu, Lavinia-Olivia, ‘Insolvency of the Natural Person and COVID 19 in Romania’ (2021) 7(4) Athens Journal of Law 563–574
Abstract: Considering that since 2009 draft normative acts have been submitted to the Romanian Parliament, for regulating the insolvency of the natural person, the adoption of the law into 2015 and the entry into force in 2018 represents an indisputable progress but also an entry into normality in the context that all EU member states already had legislation in this area. Three years after the entry into force of the insolvency of the natural law, we can say that the results anticipated by the legislator are far from the reality. The year 2020 characterised by the devastating effects of COVID 19, affected both individuals and legal entities. If the impossibility of overcoming difficult situations by legal entities leads to their deregistration, as far as natural persons are concerned, their disappearance due to the difficulties cannot be taken into account, they must continue their existence with overcoming the situation. Accessing the insolvency procedure of the natural persons is the solution that can be accessed by those in financial difficulty.

Iheme, Williams and Sanford Mba, ‘Coping with the COVID-19 Pandemic: A Comparative Study of the Capabilities of the Kenyan and Nigerian Insolvency Frameworks’ (2020) 6(2) Journal of Corporate and Commercial Law & Practice 112–138
Abstract: The COVID-19 pandemic has undeniably ravaged the global economy and plunged many countries in Africa, including Kenya and Nigeria into an economic recession. This article departs from the premise that credit is the lifeblood of market systems. Accordingly, the credit and insolvency laws of both countries must be adjusted in certain ways during and after the pandemic, in order to enable them to cope with the dire economic challenges resulting from the pandemic. The article identifies some material defects in the Insolvency Act 2015 (Kenya) and the Companies and Allied Matters Act 2020 (Nigeria), and argues that these defects will debilitate a meaningful economic recovery from the pandemic. The paper shows the lack of suitability of their existing insolvency frameworks, as well as some aspects of the public law: it proposes a number of tailor-made recommendations that benefitted from the experiences of certain other common law jurisdictions.

‘Iheme, Williams C and Sanford U Mba, ‘A Doctrinal Assessment of the Insolvency Frameworks of African Countries in Coping with the Pandemic-Triggered Economic Crisis’ (2021) 32(2) Stellenbosch Law Review 306–329
Abstract: The COVID-19 pandemic has no doubt impacted all countries of the world. In its wake, it has left a trail of mortality and an economic crisis of immense proportions. As the virus continues to mutate and containment measures are introduced, the economic challenges posed by the pandemic continue to be felt by households and businesses. By arguing that times of economic crises provide an auspicious occasion for countries to rework their insolvency frameworks and their debt restructuring regimes, this article interrogates the existing debt restructuring regimes in both Kenya and Nigeria, as provided for in the Kenyan Insolvency Act 2015 and the Nigerian Companies and Allied Matters Act 2020, and considers the role of their statutes and institutions created to facilitate debt restructuring. The article further highlights key defects and proposes important and critical changes to these legal frameworks to ensure that they are sufficiently responsive to the pandemic-triggered crisis.

INSOL Europe/LexisNexis COVID-19 Tracker of Insolvency Reforms’ (2020) 20(7) Insolvency Law Bulletin 122–123
Abstract: A tracker of insolvency reforms globally produced by Lexis Nexis in partnership with INSOL Europe is now available: ‘Coronavirus (COVID-19) Tracker of insolvency reforms globally’. Details shown by the Tracker for Australia as at 19 May 2020 are included.

Jagmetti, Luca, ‘Covid-19 Measures in Switzerland—Considerations from a Practice Perspective’ (2023) 24(2) European Business Organization Law Review 277–285
Abstract: This paper offers some observations from a practitioner perspective on Swiss measures to support businesses during the Covid-19 pandemic, as a complement to the paper ‘Governmental measures in Switzerland against mass bankruptcies during the Covid-19 pandemic’ by Rodriguez and Ulli in this volume. A brief overview of the main fiscal and non-fiscal measures is followed by analysis of the reasons for non-use of a major non-fiscal measure (a new moratorium), and some suggestions as to the lessons that can be learned from this for the design of analogous relief policies in future crises.

Jaradat, Nashat Mahmoud, ‘The Economic Impact of the Covid-19 Pandemic Related to Bahrain’s Bankruptcy Law’ (2021) 12(13) Turkish Journal of Computer and Mathematics Education (TURCOMAT) 926–942
Abstract: The purpose of this paper is to address the concerns relating to the economic impact of the Covid-19 Pandemic in the Kingdom of Bahrain by observing the preventive measures taken by the government to ensure minimal economic deterrence. Furthermore, the paper shall also address the role and the position of the Reorganization and Bankruptcy Law no. (22) 2018 of Bahrain in light of the economic duress faced by the businesses in Bahrain and the role played by the government and financial institutions in resolving matters relating to bankruptcy that would be more prevalent due to the Covid-19 Pandemic. The importance of the research is highlighted by highlighting the economic impact and the mechanism of bankruptcy procedures followed in Bahrain, especially in light of the global economic crisis it is facing due to the Covid-19 pandemic. The study aims to clarify the laws related to bankruptcy with a study of the current situation in Bahrain. As there is no previous study regarding the economic effects on the movement of trade in the Kingdom of Bahrain in light of the Corona pandemic and the role of bankruptcy law in that. It was also clarified through this study to the close relationship between local legislation and international legislation and agreements related to this subject.

Johnson, Creola, ‘Crushed by COVID-19 Medical Bills, Coronavirus Victims Need Debt Relief Under the Bankruptcy Code and Workers’ Compensation Laws’ (2021) 125(2) Penn State Law Review 453–499
Abstract: After the U.S. declared COVID-19 a pandemic, cracks in the U.S.’s fragile privatized healthcare system were exposed. At the start of the pandemic, 74 million U.S. residents were already uninsured or underinsured. To date, over 7.7 million recently terminated employees have lost their employer-provided health insurance, while over 24.6 million individuals have been infected with COVID-19 and 800,000 have been hospitalized. As a result, coronavirus survival often comes with astronomical medical bills like the $1.1 million hospital bill received by Michael Flor, a 70-year-old survivor who spent 62 days in the hospital for treatment. This Article examines how the U.S.’s flawed healthcare system and federal bankruptcy law may work together to unfairly penalize debtors burdened with medical debts arising from treatment for an infectious disease, like COVID-19. The financial fate of many burdened with infectious-disease medical bills will depend on whether a court characterizes such bills as ‘consumer’ debts. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, individuals with ‘primarily consumer debts’ are subject to a complex calculation known as the ‘Means Test.’ Debtors who have their massive medical bills characterized as non-consumer debts are allowed to wipe out those bills quickly in a Chapter 7 case. Debtors who have such bills characterized as consumer debts and who fail the Means Test are forced into a five-year repayment plan in a Chapter 13 case, where they pay down their unsecured debts, including medical bills. As a result, courts are effectively penalizing debtors who lack adequate health insurance and who involuntarily contract a contagious disease. To prevent such perverse results, this Article proposes that bankruptcy law be amended to exclude infectious-disease medical bills from the definition of consumer debt. Also, to obviate the need for some individuals to file for bankruptcy relief, this Article proposes that workers’ compensation (“workers’ comp”) laws be amended to include COVID-19 as an occupational disease for any ‘essential worker,’ as defined in each state, so that infected essential workers can have their medical bills paid from workers’ comp funds. If a former U.S. president infected with COVID-19 was considered essential for the nation’s survival and, therefore, entitled to taxpayer-funded medical care in state-of-the-art facilities, then front-line employees—who are required to work for the benefit and survival of us all—should absolutely receive COVID-19 treatment at no cost to them. Legislative action is especially needed due to the current spread of new, highly contagious mutations of COVID-19 in the U.S. With the proposed legislative amendments in place, the U.S. would ensure that survivors are protected from financial devastation due to involuntarily contracting an infectious disease.

Kamalnath, Akshaya and Hitoishi Sarkar, ‘Airline Insolvencies’ (SSRN Scholarly Paper ID 3707823, 8 October 2020)
Abstract: An important aspect of business is the possibility of insolvency. India’s new insolvency law, the Insolvency and Bankruptcy Code, 2016 (IBC) has attempted to streamline insolvencies and facilitate restructuring; although there are particular issues for airline insolvencies. The issue of cross-border insolvencies further remains unaddressed in the IBC and is particularly relevant to airlines. This chapter aims to outline international best practices in corporate insolvency and also India’s approach; with a specific focus on the civil aviation sector.This chapter is divided into five parts. The first part is the introduction. The second part gives an overview of the goals of corporate insolvency and the legislative framework in India. Part III explores specific solutions for insolvencies of companies in the civil aviation sector internationally. Part IV details airline insolvencies in India and Part V concludes with some thoughts about the future legislative reform and development in India.

Keeper, Trish, ‘New Zealand’s New Temporary Safe Harbour and Business Debt Rehabilitation Scheme: Measures Introduced in Response to COVID-19’ (2020) 20(7) Insolvency Law Bulletin 126–128
Abstract: The New Zealand government has introduced legislation to temporarily change certain insolvency and directors’ duties laws due to the impacts of COVID-19. These changes are included in the ‘COVID-19 Response (Further Management Measures) Legislation Bill 2020’ (the Bill) that passed its third reading in the House of Representatives on 13 May 2020. The focus of this article is two changes to the ‘Companies Act 1993’ (the Act), although the Bill amends or modifies the application of 45 different Acts. The two changes are: the introduction of a temporary safe harbour for directors from breaches of the duties against reckless trading and incurring unperformable obligations; and the introduction of a temporary COVID-19 Business Debt Hibernation (BDH) scheme. These measures were outlined in a Cabinet Paper released on 4 April 2020 (the Cabinet Paper), that stated that the proposed changes were necessary to address the impacts of COVID-19 on otherwise profitable and viable businesses that are facing a real risk of being liquidated in the near future because of the serious disruption they are incurring. The two amendments are discussed in more detail below.

Kieti, Denis Ndolo, ‘Flattening the Insolvency Curve: The Adaptability and Responsiveness of Kenya’s Corporate Insolvency Law in Tackling Pandemic and Economic Depression Insolvencies’ (LLM Thesis, Strathmore University, 2022)
Abstract: The covid-19 viral pandemic has negatively affected global economic growth prompting governments across the world to set up fiscal and monetary policy interventions to mitigate the adverse effects of the pandemic on their economies. Kenya, as a consequence, similarly set up economic and financial support measures to forestall economic depression. Unlike some major economies such as the U.K. which modified their insolvency regimes to forestall pandemic insolvencies, there were no such amendments made to the Kenya’s Insolvency Act. This is despite the unpredictability presented with new more deadly covid-19 variants coming up, which has further dampened the pace of economic recovery. Utilising doctrinal and comparative research methods, this thesis has examined whether Kenya’s corporate insolvency law is adaptive and responsive in the event of an emergency and whether the objectives of the Insolvency Act, (Act No.18 of 2015) have been achieved following the ongoing pandemic. It has evaluated the adaptability and responsiveness of Kenya’s insolvency law to support companies during an economic depression; the kind brought about by the current pandemic. By referring to the vital elements of an efficient and effective insolvency framework outlined in the UNCITRAL Legislative Guide on Insolvency Law, it has been confirmed that Kenya’s current insolvency law is inadaptable and unresponsive to the unprecedented challenges of the pandemic or other emergency, such as an economic depression. Therefore, by examining how the United Kingdom has responded to the emergency, it has been established that Kenya can borrow critical lessons. The thesis has laid out recommendations on emergency policy and legislative reforms that could make the Kenyan insolvency framework better suited to supporting businesses during emergencies. There is limited research on insolvency law and legal reforms in Kenya touching on the pandemic and the thesis contributes to this literature on Kenyan corporate insolvency law by outlining the legal framework as it currently is and its limitations. The study contributes knowledge by analysing the theoretical framework underpinning insolvency law. It also outlines the international insolvency benchmarks by the IMF, World Bank and UNCITRAL and how these can influence Kenya. This literature on Kenyan corporate insolvency law is limited, and on this, the thesis is enlightening.

Lasák, Jan, ‘Changes to Corporate Restructuring Laws in the Czech Republic During the Covid-19 Pandemic’ (2023) 24(2) European Business Organization Law Review 349–366
Abstract: In the course of the Covid-19 global pandemic, corporate restructuring laws worldwide underwent a stress test as the financial health of companies significantly deteriorated. In response to public demand, legislators in the Czech Republic adopted various bail-out programmes and bail-in measures in order to provide debtors who ran into temporary problems in connection with the Covid-19 pandemic with additional protection against individual creditors to help solve their financial troubles. This paper outlines the various bail-in and bail-out measures that were introduced during the critical phase of the pandemic in 2020–2021 and analyses the extraordinary measures that were adopted in the Czech Republic. After the pandemic, once the temporary emergency measures were lifted, the number of insolvency petitions and proceedings surprisingly decreased in comparison to previous years. This may suggest that financial aid programmes in the Czech Republic may even have been too generous. While public debt in the Czech Republic increased dramatically during the pandemic as a result of the governmental bail-out/financial aid programmes, the ‘helicopter money’ contributed significantly to accelerating the increase in the country’s inflation rate.

LeBrun, Daniel, ‘Keeping the Lights on through Dark Times: How Subchapter V Bankruptcy Should Protect Small Businesses Decimated by the Pandemic’ (2021) 37(3) Touro Law Review 1575–1604
Abstract: Small to mid-market, independent businesses are at the heart of our economy and play a pivotal role in job creation. While it’s estimated by the House of Representatives that these companies account for over half of overall U.S. employment, they have been traditionally underserved in bankruptcy law. Historically, the resources necessary to complete a chapter 11 bankruptcy are not within reach for these small to mid-market businesses. Passed in 2019, the Small Business Reorganization Act has modified the Bankruptcy Code to provide new avenues for these small businesses in need. Impactful in its own right, it has emerged as a lifeline to small businesses decimated by the pandemic. This Note will focus on the fundamental changes to the Bankruptcy Code brought by the SBRA and what improvements can still be made.

Levenstein, Eric, Roxanne Webster and Malachizodok Mpolokeng, ‘Business Rescue When Liquidation Proceedings Have Been “Initiated”’ (2020) 20(6) Without Prejudice 8–9
Abstract: The COVID-19 pandemic has had an unprecedented impact on the South African economy. Although necessary, the measures that have been employed to deal with the novel coronavirus, which include a nationwide lockdown, have resulted in several companies and businesses feeling the pinch. Despite government’s efforts to ameliorate these challenging conditions through various social relief and economic support packages, South African companies and businesses remain under enormous pressure, with many facing the harsh reality of financial distress. It comes as no surprise, therefore, that companies are increasingly turning to business rescue.

Lewis, Paul B, ‘The “Small Business Reorganization Act” and the Coronavirus’ (2020) 20(7) Insolvency Law Bulletin 129–131
Abstract: This article will look at the changes made to the restructuring of small businesses under the ‘Small Business Reorganization Act’. To do so, it will first provide a brief overview of Chapter 11, followed by a discussion of the changes made to Chapter 11 under the 2019 Act. The article will conclude with a discussion of the impact of the Act to date as small businesses in the United States struggle to survive.

Linklater, Lisa and Jodie Wildridge, ‘Changing Times: Aspects of Creditor Enforcement in Administration and in the New Moratorium’ 33(3) Insolvency Intelligence 96–98
Abstract: Considers the possible impact on creditors of the temporary ban on insolvency proceedings imposed during the coronavirus pandemic. Reviews key aspects of the moratorium, the issues arising when administrators and courts are deciding whether to consent to enforcement of creditors’ rights, the relevant creditor considerations, and how the moratorium’s rules compare to those of the Corporate Insolvency and Governance Bill 2019-21.

Lubben, Stephen J, ‘Puerto Rico; Act III’ (2020) 15(4) Capital Markets Law Journal 453-463
Abstract: The Commonwealth of Puerto Rico and certain of its affiliated entities have filed ‘bankruptcy’ petitions under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (‘PROMESA’). This short paper provides a brief update on the current status of the restructuring process. As is well known, Puerto Rico’s economy was already deeply distressed, and then came hurricanes, earthquakes, and COVID-19. Given the poor state of the local economy, the island arguably needs extensive debt relief. Before COVID-19, the oversight board had proposed modest debt relief, and even that was deemed unacceptable by bondholders, who argued for cuts to local pensions equal to those being faced by bondholders. As a result, the restructuring process is apt to continue to be quite lengthy and contentious. Puerto Rico’s indeterminate legal status – as neither U.S. state nor independent nation – further complicates matters.

McCormick, Hamish, ‘AFSA: Personal Insolvency and the Response to the COVID-19 Crisis’ (2020) 32(2) Australian Restructuring Insolvency & Turnaround Association Journal 45
Abstract: My last contribution to the ARITA Journal came just weeks after the devastating bushfires tore through large parts of the country. Thousands of Australians were affected, and the economic impacts of the disaster will likely linger for many years.

McHattan, Natasha, ‘“COVID-19” Update: Government Response to COVID-19 Pandemic’ (2020) 32(2) Australian Restructuring Insolvency & Turnaround Association Journal 6–12
Abstract: A summary of the key Government measures introduced in response to the economic and related impacts of coronavirus.

Menezes, Antonia and Harry Lawless, ‘A Cross-Country Policy-Maker Perspective on Corporate Restructuring Laws Under Stress’ (2023) 24(2) European Business Organization Law Review 373–386
Abstract: The onset of the COVID-19 pandemic saw a period of rapid experimentation with insolvency law settings, designed to prevent a wave of insolvencies. Although governments acted quickly to keep debtors out of insolvency processes, they did not alter high levels of underlying indebtedness. In this worsening economic climate characterized by low growth, high inflation, fiscal tightening and high indebtedness, it appears, in certain countries, that these measures may have deferred, rather than prevented, high insolvency levels. A key economic legacy of the COVID-19 pandemic is the extensive fiscal stimulus and the resulting budgetary constraints this has placed on governments. In this context, there is increasing evidence of the importance of frameworks for out-of-court debt workouts as a complement to formal corporate restructuring frameworks.

Minnes, Odelia and Dov Solomon, ‘Game of Thrones: Corporate Law and Bankruptcy Law in the Arena of Directors’ Liability’ (2021) 27(1) Columbia Journal of European Law 1–33
Abstract: A company in financial distress is bound to experience turbulence. In particular, the zone of insolvency is a crucial time in a company’s life in which conflicts of interest between shareholders, managers, and creditors are sharply enhanced. Directors’ liability during this period is a recurring topic of interest. The current COVID-19 pandemic and the global economic crisis generated by it bring this topic to the forefront once more. This Article points to two distinct approaches to this issue. The first is represented by the U.S. legal system, in which directors’ liabilities do not change in the zone of insolvency but, rather, conform to the same standards set by corporate law. We call this the ‘corporate law approach.’ The second method is represented by the U.K. legal system, which sets different standards for directors’ actions in the zone of insolvency, requiring them to minimize creditors’ losses. We refer to this as the ‘bankruptcy law approach.’ This Article shows that there are significant shortcomings to the latter approach. As a result, this Article concludes that the corporate law approach is comparatively more efficient. This Article further demonstrates the superiority of the corporate law approach by analyzing the shared theoretical, normative, and practical linkages between corporate and bankruptcy law. Finally, this Article discusses two possible policy implications of our discussion, one broader and one specifically tailored to minimize the negative consequences from the COVID-19 crisis.

Mithal, Arnav, ‘Amendments to Insolvency and Bankruptcy Code 2016 in Light of COVID-19’ (SSRN Scholarly Paper ID 3621341, 6 June 2020)
Abstract: The impact of COVID-19 has forced many companies to file for bankruptcy and amongst this the government has made amendments to the Insolvency and Bankruptcy Code 2016 to prevent companies from insolvency proceedings. Such amendments are treated a boon for the companies as it has given them chance of survival in these difficult times.

Mohd Ali, Hasani, ‘Impact of COVID-19 on Corporations in Malaysia from a Corporate Restructuring and Insolvency Law Perspective’ in Loganathan Krishnan and Wai Meng Chan (eds), The Impact of COVID-19 on Corporations and Corporate Law in Malaysia (Springer Nature, 2022) 171–196
Abstract: The COVID-19 pandemic has caused economic stagnancy that triggered many companies to suffer from financial distress and close down. The pandemic also sparks the practicality of the present laws on corporate restructuring. This chapter outlines the Malaysian government’s intervention through fiscal injection and statutes amendments. Further, it addresses the existing laws governing directors’ duties at a critical time within the insolvency zone. Besides, the discussion focuses on the applicability of restructuring measures available under the Malaysian Companies Act 2016. Methodologically, the chapter draws on the current updates for Malaysia on the issue through reliable secondary sources, employs doctrinal analysis to the relevant statutory provisions, and, whenever relevant, compares them with the UK and Australian positions. In the end, the discussion finds that Malaysia has adequate laws to cater to the restructuring needs of the impacted companies during the pandemic. Not to mention some changes were hastily introduced. The situation benefits from statutory rescue mechanisms, apart from the informal ones. The courts are mindful of protecting creditors yet are willing to get the ailing companies through the predicament. In addition, the law has many options to keep up with the demanding situations. Unfortunately, the restructuring mechanisms in place are too secured-creditors oriented. Hence, it should set out more rescue-friendly measures for stakeholders’ broader interests, especially the entrepreneurship community, unsecured creditors and employees. The finding also reveals weaknesses in fraudulent trading provisions and lack of risk management as best practices in corporate governance.

Morrison, Edward R and Andrea C Saavedra, ‘Bankruptcy’s Role in the COVID-19 Crisis’ (SSRN Scholarly Paper ID 3567127, 7 April 2020)
Abstract: Policymakers have minimized the role of bankruptcy law in mitigating the financial fallout from COVID-19. Scholars too are unsure about the merits of bankruptcy, especially Chapter 11, in resolving business distress. We argue that Chapter 11 complements current stimulus policies for large corporations, such as the airlines, and that Treasury should consider making it a precondition for receiving government-backed financing. Chapter 11 offers a flexible, speedy, and crisis-tested tool for preserving businesses, financing them with government funds (if necessary), and ensuring that the costs of distress are borne primarily by investors, not taxpayers. Chapter 11 saves businesses and employment, not shareholders. For consumers and small businesses, however, bankruptcy should serve as a backstop to other policies, such as the CARES Act. Consumer bankruptcy law’s primary goal is to discharge debts, but that’s not what most consumers need right now. What they need is bridge financing, and perhaps forbearance, until the crisis ends, they get back to work, and they regain their ability to pay their debts again. These key policy levers—bridge financing and forbearance—are available in theory to small businesses in Chapter 11, especially if the government supplies the bridge financing when credit markets are dysfunctional. The practical reality is that bankruptcy is expensive for small businesses, which may deter them from using it in the first place. Equally important, our courts will be flooded if Chapter 11 is the primary rescue policy for small businesses.

Nuriskia, Centia Sabrina and Ahmad Yoga Novaliansyah, ‘The Urgency of Regulations Revision Related to Filing Bankruptcy and Postponing Debt Payment Obligations Amid the COVID-19 Pandemic’ (2021) 5(2) Lex Scientia Law Review 105–122
Jurisdiction: Indonesia
Abstract: The purpose of this research is to analyze the requirements of bankruptcy regulations and postponement of debt payment obligations on the increase in bankruptcy filings and delays in debt payment obligations in the middle of the COVID-19 Pandemic. This research uses a normative juridical research method with a statutory approach and a conceptual approach that is supported by primary and secondary legal materials. The results of this research indicate that the increase in filing for bankruptcy delays in paying debt obligations at the Commercial Court is due to unclear rules regarding filing for bankruptcy, especially the requirements in filing for bank bankruptcy do not specify the amount of debt that can be filed for bankruptcy is a need for consideration in making and stipulating bankruptcy arrangements, both in the Draft Civil Procedure Code and the Bankruptcy Law and Suspension of Debt Payment Obligations, especially on issues: the amount of debtor debt, simple evidence, creditors holding guarantees in bankruptcy confiscation in bankruptcy wage rating, bankruptcy estate settlement, and position of the arbitration award in bankruptcy cases.

Pardo, Rafael I, ‘On Bankruptcy’s Promethean Gap: Building Enslaving Capacity into the Antebellum Administrative State’ (2021) 48 Fordham Urban Law Journal (forthcoming)
Abstract: As the United States contends with the economic crisis triggered by the COVID-19 pandemic, federal bankruptcy law is one tool that can be used to resolve the financial distress suffered by individuals and businesses. When implementing this remedy, the question arises whether the law’s application should be viewed as limited to addressing private debt matters, without regard for the public interest. This Article answers the question by looking to modern U.S. bankruptcy law’s first forebear, the 1841 Bankruptcy Act, which Congress enacted in response to the depressed economic conditions following the Panic of 1837. That legislation created a judicially administered system that nationalized bankrupts’ assets, some of which featured prominently in the business of slavery. This Article focuses on a specific episode from New Orleans, which at the time was the nation’s third-most-populous city, had the nation’s largest slave market, and had one of the nation’s largest money markets. One of the bankruptcy cases commenced in that city involved the administration and sale of Banks Arcade, which was a premier commercial exchange for auctioning enslaved Black Americans. This history about how the federal administrative state restructured one component of the U.S. slavery complex should prompt critical reflection on how present-day bankruptcy law manages the fallout from a financial crisis. This Article concludes that courts have the authority to permit the public to advocate for its interests in distressed assets redeployed through the federal bankruptcy system.

Perera, Ángel Carrasco, ‘Bank Loans under Spanish State Guarantee in Times of Covid: Clawback of Payments Made to Financial Lenders after the Commencement of Insolvency Proceedings’ (2023) 38(11) Journal of International Banking Law & Regulation 421-425
Abstract: Three financial institutions granted separate loans to refinance unpaid debt owed by almost the same insolvent debtor. The new financing was guaranteed by the Spanish state, drawing to a line of credit exceptionally open in times of Covid-19. The financial lenders had old debts paid off with the new money. Upon subsequent insolvency proceedings of the debtor, a Companies Court has held that the payments made with the money from the new finance must be void, because the money received by the debtor and guaranteed by the state would have to have been distributed pari passu among the rest of the argues why this is so.

Pereira, Eduardo G, Tolulope O Taiwo and Ngozi Chinwa Ole, ‘Addressing Residual Liability and Insolvency in Disused Oil and Gas Infrastructure Left in Place: The Cases of Brazil, Nigeria, and Trinidad and Tobago’ (2020) 11(2) Journal of Sustainable Development Law and Policy 326–361
Abstract: This article analyses the decommissioning framework for oil and gas infrastructures in Brazil, Nigeria, and Trinidad and Tobago. It examines whether the existing provisions in each country are able to guarantee that the government and, by extension taxpayers, do not bear the costs of decommissioning and, the consequences of insolvency on residual liabilities. An additional motivation for this examination is the ongoing Coronavirus Disease 2019 (COVID-19), a pandemic with significant adverse impacts on the oil and gas industry. A likely consequence of the economic devastation from this is the insolvency of any party with decommissioning obligations.The article argues that the provisions of the Brazil petroleum legislation on the reversion of abandoned installations to the government could imply that taxpayers have to bear the residual liabilities without any compensation from the concerned concessionaires or contractors. It also argues that the provisions of the Petroleum Law to the effect that ‘the reversion of facilities does not entail any expense whatsoever for the Brazilian government ’does not certainly translate to pecuniary compensation to the latter for assuming the future residual liabilities from abandoned installations. The Nigerian and the Trinidad &Tobago Decommissioning Framework also suffer the latter risk of the government bearing the residual liabilities for such disused installations.In Nigeria, the framework is silent on who bears the residual liabilities for disused installations. However, it is argued that the provisions of the Production Sharing Contracts on the transfer of ownership to the Nigerian government implies that they would have to bear eventual liabilities for such disused installations. Even in cases where the licensee or contractor may bear the burden of residual liabilities, the problem of future insolvency and cessation of such companies may entail that taxpayers bear the burden of residual liabilities. The article concludes with key recommendations on how to address the identified gaps using lessons from best practices such as United Kingdom, Norway and United States of America. One of such proposals is on the allocation of liability where there is a transfer of interest. Another is for joint and several or at least secondary liability of responsible parties even after decommissioning activities are over; a recommended provision to this effect is also provided. The third recommendation is on how time-constrained residual liability can be used alongside lump sum payments to limit the State’s financial exposure for decommissioning costs.

Permatasari, Cintya Sekar Ayu and Octa Nadia Mellynda, ‘Temporary Measures on Bankruptcy: Alternatives to the Moratorium on Act 37/2004 in Resolving Indonesian Bankruptcy During the COVID-19 Pandemic’ (2021) 5(2) Lex Scientia Law Review 19–40
Abstract: The high number of bankruptcies in Indonesia, which increased to 54% in the pandemic era, had negative impacts on the economic ecosystem in Indonesia. A regulation is needed that can reduce the number of bankruptcies, in which the moratorium of Act 37/2004 is a discourse that will be predicted as the main solution. The moratorium of Act 37/2004 with its weaknesses has been rejected by many parties, so this research will offer a more appropriate alternative solution in the form of setting temporary measures on bankruptcy. This study seeks to describe the urgency and prospects of the presence of temporary measures on bankruptcy in Indonesia and recommend the regulation and implementation of temporary measures on bankruptcy in Indonesia. This legal research is normative legal research with data obtained from library research analyzed descriptive-qualitatively. The results of the study indicate that the moratorium of Act 37/2004 does not provide fair benefits for debtors and creditors in resolving bankruptcy problems so that it will actually hinder investment in Indonesia. Temporary measures on bankruptcy is an alternative that fills the absence of law in Indonesia regarding provision to bankruptcy relaxation. These measures provide fair benefits for both parties while still being able to file for bankruptcy but with a certain threshold and stimulus. Seeing the success of temporary measures on bankruptcy in various countries in reducing the number of bankruptcies, Indonesia needs to immediately implement the same thing in the Peraturan Pemerintah Pengganti Undang-Undang (PERPU).

Prusko, Wolfram and David Ehmke, ‘Restructuring Lessons from the Covid Pandemic: Bail-Out vs. Market Approach’ (2023) 24(2) European Business Organization Law Review 207–229
Abstract: Bail-out, bail-in, or restructuring? In this article, we argue that restructuring has its rightful place in macro crises, such as the Covid pandemic. A policy that primarily focuses on insolvency avoidance and bail-outs is misled as it creates unwanted risk incentives, distorts market selection and resource allocation, and reduces beneficial transformative pressure. As a crisis typically goes hand in hand with new and fundamental developments the changing environment should be met by competitive innovation. Bail-outs which tend to preserve the status-quo may be justified as part of a comprehensive emergency strategy and to overcome temporary market dysfunction. Such a response strategy, however should always be designed in concert with restructuring options. We propose amendments to the German insolvency and restructuring laws to address the shortcomings of restructuring/insolvency uncovered during the Covid pandemic. The goal is to improve the restructuring/insolvency regime so that it can better deal with the specific challenges of macro crises.

Rasmussen, Robert K, ‘COVID-19 Debt and Bankruptcy Infrastructure’ (2021) 131 Yale Law Journal Forum 337–362
Abstract: Part I of the Essay describes the effect that the pandemic and the accompanying government responses have had on the balance sheets of large corporations. The upshot of this change is the potential for a large increase in the number of Chapter 11 cases over the next few years. Part II describes the existing state of bankruptcy infrastructure, which includes extensive reliance on three venues. Part III explains how Congress can prepare the judicial system for such an increase by mandating the creation of special Chapter 11 panels within each court of appeals.

Rodriguez, Rodrigo and Jasmin Ulli, ‘Governmental Measures in Switzerland Against Mass Bankruptcies During the Covid-19 Pandemic’ (2023) 24(2) European Business Organization Law Review 267–276
Abstract: This article examines the impact of the Covid-19 pandemic on debt enforcement and insolvency law in Switzerland. Despite the absence of strict lockdown measures, many sectors of the Swiss economy suffered significant losses. The government responded by introducing generous public support schemes to keep businesses afloat. The article focuses on the modifications made to Swiss law during the pandemic to avoid mass bankruptcies and facilitate restructurings. The government first introduced a general stay of proceedings, preventing debt collection but not affecting the underlying obligation to pay, and later the Covid-19 Ordinance on Insolvency Law, which provided relief to companies, especially SMEs, to implement the necessary restructuring measures. Some unsuccessful initiatives, such as a special moratorium introduced for SMEs, are also discussed. Finally, the article considers the limited take-up of some of the insolvency measures and discusses the possible consequences of the obligation to repay Covid-19 loans in the future. Overall, it provides a comprehensive overview of the impact of the pandemic on debt enforcement and insolvency law in Switzerland and the measures taken to mitigate its effects.

Routledge, James, ‘Rethinking Insolvency Law amid the COVID-19 Pandemic’ (2021) Pacific Accounting Review (advance article, published 6 April 2021)
Purpose: Amid the COVID-19 pandemic, it is important to consider the effectiveness of insolvency law given the increase in companies facing financial distress. Current insolvency law was not designed in the context of the unprecedented challenges of the pandemic. Therefore, it may not provide the framework needed to assist the rehabilitation of distressed companies that is important to economic recovery. The purpose of this paper is to briefly discuss the rethinking of insolvency law policy with a view to maximising opportunities for rescue and rehabilitation.
Design/methodology/approach: The commentary offers suggestions on how insolvency law can maximise opportunities for rehabilitation. The approach is to consider competing theoretical perspectives on the objective of insolvency law and provide commentary on rethinking key insolvency law provisions to better meet the needs of distressed businesses in the unprecedented circumstances of the pandemic and into the future.
Findings: This paper concludes that in the context of the pandemic insolvency policy that is value-based and debtor-friendly is needed to promote rehabilitation. Insolvency law should refocus on debtors and rehabilitation rather than being excessively focussed on the interest of creditors.
Originality/value: This paper offers a unique and timely commentary on the capacity of insolvency law to respond to the unforeseen COVD-19 pandemic.

Shearman & Sterling, ‘Corporate Insolvency and Governance Act 2020 Gains Royal Assent’ (2020) 35(10) Journal of International Banking Law and Regulation N127–N128
Abstract: Notes key measures introduced by the Corporate Insolvency and Governance Act 2020, their application to limited liability partnerships, and Re Lehman Brothers Europe Ltd (In Administration) (Ch D) on whether former administrators whose discharge from liability was not dealt with by the creditors’ committee before it was disbanded had standing to apply to the court for discharge under the Insolvency Act 1986 Sch.B1 para.98(2)(c).

Shearman & Sterling, ‘COVID-19: Changes to Be Made to UK Insolvency Regime’ (2020) 35(7) Journal of International Banking Law and Regulation N88
Abstract: Notes impending revisions to the UK insolvency regime, in response to the coronavirus pandemic, to permit UK companies undergoing restructuring or corporate rescue to continue trading. Details the main reforms, including a moratorium to protect companies considering restructuring, the protection of suppliers, and the temporary suspension of the wrongful trading regime under the Insolvency Act 1986 s.214.

Shearman & Sterling, ‘United Kingdom: COVID-19 – Insolvency Framework’ (2020) 35(8) Journal of International Banking Law and Regulation N98
Abstract: Highlights the Government’s intention to introduce changes to the insolvency framework in response to the coronavirus pandemic. Details the additional restructuring tools proposed, including protection of companies’ supplies to allow trading to continue, and the introduction of a new restructuring plan.

Singh, Ram and Hiteshkumar Thakkar, ‘Settlements and Resolutions Under the Insolvency and Bankruptcy Code: Assessing the Impact of Covid-19’ (2021) 69(3) The Indian Economic Journal 568–583
Jurisdiction: India
Abstract: In this study, we develop a model to examine the dynamics of the insolvency and bankruptcy code (IBC) processes in the aftermath of Covid-19. We use the model to study the impact of the pandemic on the following aspects of the financial disputes and their implications: number of disputes between debtors and their creditors in the aftermath of Covid-19; frequency of these disputes coming to the National Company Law Tribunal (NCLT); impact of the pandemic on the frequency of ‘out of court’ settlements; the nature of disputes settled amicably and those adjudicated under the corporate insolvency resolution process of the NCLT; and the recovery rates in the settled versus litigated disputes. We show that while the number of disputes will go up, the frequency of settlements will come down in the post-Covid world. Moreover, the post-pandemic legal changes made to the IBC are detrimental to the interest of the micro, small and medium enterprises and also for the formal and informal sector employees. We offer suggestions for promoting out-of-court settlements to save time and costs of the parties involved. Our suggestions related to public policy can help mitigate the macroeconomic costs of the pandemic.

Sprinz, Petr, ‘Changes to Czech Corporate Restructuring Laws During the COVID-19 Pandemic: A Comment’ (2023) 24(2) European Business Organization Law Review 367–371
Abstract: The author briefly comments on various measures undertaken in order to mitigate the effects of the extraordinary situation in connection with the pandemic of SARS-CoV-2 and seeks to put them into the context of the available data. In this connection, the paper mainly focuses on corporate insolvency filings, extraordinary moratoria and suspension of loan repayments. The author also briefly describes the future outlook.

Stanghellini, Lorenzo, ‘The Pandemic as a Chance to Modernise Italian Insolvency and Restructuring Law’ (2023) 24(2) European Business Organization Law Review 251–266
Abstract: The pandemic exerted a profound influence on Italian insolvency and restructuring law. In 2020, after several years of preparation, a wide-ranging reform, whose focus was to enhance the judicial management of distress, was about to enter into force in Italy. In that context, there were two events inducing a radical rethinking of that reform: the pandemic and the duty to transpose Directive (EU) 2019/1023 (which the Italian legislature had largely overlooked while devising the project for reform). The result of the rethinking has been a set of rules more restructuring-friendly, partly and initially conceived as a response to the Covid-19 emergency, but largely preserved also in the post-pandemic framework. Difficult challenges lie ahead, the main one being the heavy legacy of State-guaranteed corporate loans, for which an ad hoc scheme has been developed. A significant and lasting consequence of the legislation enacted during the pandemic is the suspension of the ‘recapitalise or liquidate’ rule, on which the Italian corporate law system has traditionally relied for crisis detection purposes. This paradigm shift comes at the same time as an increased emphasis on early detection of financial distress and an increase in directors’ responsibility in this regard.

Stef, Nicolae and Jean-Joachim Bissieux, ‘Resolution of Corporate Insolvency during COVID-19 Pandemic: Evidence from France’ (2022) 70 International Review of Law and Economics Article 106063
Abstract: We investigate how the lockdown enforcement by French authorities is associated with the resolution of corporate insolvency. In this sense, we make a distinction between four legal procedures, namely the amicable liquidation (out-of-court exit), the judicial liquidation (court-driven exit), the restructuring procedure available to non-defaulted firms, and the restructuring procedure available to defaulted firms. Using a sample of 3488 non-listed and non-financial French firms, our estimates yield three major findings. First, the likelihood of judicial liquidation increased after the lifting of the quarantines compared to the pre-pandemic period. Second, the non-defaulted firms had a higher likelihood to reorganize in court during the second lockdown. Third, the lifting of the first lockdown led to a decrease in the probability of restructuring the assets of defaulted firms. Although the main objective of the lockdown was to limit spread of the virus, its enforcement has not encouraged the use of the out-of-court exit path.

Stegner, Clemens and Wolfgang Höller, ‘Coronavirus – Effects on the Insolvency Filing?’ [2020] Lawyer (Online Edition) 1
Abstract: The article discusses how the COVID-19 presents companies with major challenges including restricted operation, cancellations and the lack of customers that can also lead to liquidity problems in otherwise healthy companies and discusses requirements for opening insolvency proceedings. It informs that in the case of corporations, insolvency law overindebtedness – are met, there is an obligation of the Austrian Insolvency Code to file an application for bankruptcy without culpable hesitation.

Stuber, Walter, ‘Brazil: COVID-19 - Insolvency Lawsuits’ (2020) 35(8) Journal of International Banking Law and Regulation N89–N90
Abstract: Highlights the 31 March 2020 publication by the President of Brazil’s National Council of Justice of Recommendation No.63/2020, detailing six guidelines to mitigate the impact of restrictions introduced in response to the coronavirus pandemic, and relating to courts dealing with bankruptcies and business recovery actions. Summarises the main recommendations, including that general face-to-face meetings with creditors be suspended.

Swift, Duncan, ‘Rescue, Recovery & Renewal’ (2020) 13(2) Corporate Rescue and Insolvency 64–65
Abstract: Reflects on the features of Chancellor Rishi Sunak’s first Budget that may affect insolvency and restructuring, including measures to help businesses through the coronavirus pandemic. Suggests that confirmation of changes to the creditor status of HMRC, and proposals to make directors personally liable for corporate tax debts where abuse of the insolvency regime is suspected, will hamper corporate rescue and represent a missed opportunity.

Tirado, Ignacio, ‘Corporate Restructuring Laws Under Stress: The Case of Spain’ (2023) 24(2) European Business Organization Law Review 317–336
Abstract: The COVID-19 crisis caused an unprecedented global disruption of economic activity, which was especially intense in Spain due to the nature of its economy. Many legal and institutional reforms were adopted, and extraordinary economic measures implemented. As interim reforms are lifted and economic incentives wear off, Spain will need to grapple with the economic damage caused by the pandemic. Arguably, the reform of the insolvency system recently approved, which precedes and is independent of the measures enacted to stave off risks caused by the pandemic, provides an enhanced and improved framework to deal with business insolvency. Spain now counts on a state-of-the-art hybrid restructuring system and a modern regulation to deal with the financial and economic distress of micro enterprises. However, the special legislation approved during COVID, and the side effects of the economic measures came with a cost and are already interfering with the day-to-day application of the new insolvency system, especially concerning public claims and public guarantees. Further, the Spanish legal framework has still some shortcomings which might prove a real hindrance to resuming access to credit at adequate levels.

Tong, Edwin, ‘Singapore Government’s Responses to the COVID-19 Crisis: An Overview and Analyses of the Salient and Novel Legal Issues’ 2021 Singapore Comparative Law Review 28–41
Abstract: Amidst the pandemic, the Singapore Government rolled out various crisis management measures to minimise and cushion the economic impact, preserve jobs and capabilities, and support households. First, the Ministry of Finance passed a total of four budgets in 20204 which committed close to S$100 billion of support measures to deal with COVID-19. Some of the key measures to support businesses and workers included the Job Support Scheme, which provided wage support to employers, in which firms in the hardest-hit sector received the most support. Other key measures included the SGUnited Jobs and Skills Package to help Singaporeans access immediate short-term as well as longer term job opportunities and acquire job-related skills and capabilities. In addition, the Self-Employed Person Income Relief Scheme provided cash pay-outs to self-employed persons with less means and family support whose livelihoods have been affected by COVID-19. The COVID-19 Support Grant and COVID-19 Recovery Grant also provided temporary financial support to workers in lower- to middle-income households that had suffered job loss or significant income loss due to COVID-19. Second, the Monetary Authority of Singapore worked with banks on a series of voluntary initiatives by the financial institutions, such as the deferment of payments on mortgages. Third, the focus of this article, the Ministry of Law ('MinLaw') introduced legislation to provide reprieve to affected businesses and individuals. MinLaw enacted the COVID-19 (Temporary Measures) Act ('COTMA'), which was amended seven times to refine Singapore's response to the evolving COVID-19 situation, and also introduced the Simplified Insolvency Programme ('SIP') and Sole Proprietors and Partnerships ('SPP') Scheme to provide distressed small businesses with an avenue for simplified and costefficient debt-restructuring and insolvency proceedings. This article provides a brief overview and analysis of the salient or novel legal issues arising from some of the key relief measures introduced by MinLaw:
a) Relief for inability to perform contractual obligations under Part 2 of COTMA;
b) Rental relief framework under Part 2A of COTMA;
c) Relief for contracts affected by construction delays under Part 8 of COTMA;
d) The Re-Align Framework under Part 10 of COTMA; and
e) The SIP and SPP Scheme.

Tribe, John and Stephen Baister, ‘The Suspension of Debt Obligations and Bankruptcy Laws during World War I and World War II: Lessons for Private Law during the Corona Pandemic from Previous National Crises’ (2020) 33(3) Insolvency Intelligence 67–78
Abstract: On 28 March 2020, the Insolvency Service announced the government was placing before Parliament what are presumed to be temporary reforms to the insolvency law to help companies through the current economic crisis caused by the corona pandemic. The reforms that have so far been highlighted are a moratorium on the ability to present or pursue winding-up petitions and the suspension of the law on wrongful trading. These emergency moves are not without precedent. This article examines a range of measures that were introduced during the First and Second World Wars that were designed to respond to the unusual circumstances caused by a global crisis. The effect of these measures, e.g. the Liabilities (War-Time Adjustment) Act 1941, was to postpone debtors’ liabilities but not to eliminate them. This article demonstrates that these measures went some way towards meeting their objective of saving small businesses from bankruptcy.

Vaccari, Eugenio, ‘Changes to UK Insolvency Rules in the Wake of Covid-19: A Much-Needed Help for Businesses or an Unjustified Harm to the Rule of Law?’ in Carla Ferstman and Andrew Fagan (eds), Covid-19, Law and Human Rights: Essex Dialogues (School of Law and Human Rights Centre, University of Essex, 2020) 127–136
Abstract: The economic impact of the Covid-19 outbreak has triggered calls for emergency fiscal and legislative measures to address liquidity and legal problems in several areas of law. Some of these measures address specifically companies in financial distress and insolvency statutes. Among the proposed changes to the insolvency framework, the UK Government announced a suspension of wrongful trading provision as outlined in section 214 of the Insolvency Act 1986 (‘the Act’). This announcement was later implemented (with significant amendments) in section 10 of the Corporate Insolvency and Governance Bill (‘the Bill’). This measure applies retrospectively from 1 March 2020 for a 3-month period or one month after the coming into force of the Bill, whichever is later. To assess the need for such a measure, this paper investigates the requirements to establish a successful claim for wrongful trading and the interpretation of those requirements, stemming from the case law. It also discusses the announced suspension as implemented by the Government in the Bill. This analysis strongly suggests that the suspension of (liability for) wrongful trading does nothing to achieve the purpose for which it was introduced, i.e. to facilitate business rescue and/or to help viable companies to survive the crisis created by the Covid-19 pandemic. To the contrary, the suspension of personal liability actions against the directors is likely to curb the rule of law in the UK. Laws are deferred and the exercise of civil liability remedies restricted without any apparent justification and with no proof that this measure is relevant to address the crisis created by the Covid-19 pandemic.

van Zwieten, Kristin, ‘Mid-Crisis Restructuring Law Reform in the United Kingdom’ (2023) 24(2) European Business Organization Law Review 287–315
Abstract: Economic shocks create insolvency law-making space, generating opportunities for legal reform that may be absent in good times. Policymakers may suddenly acquire a mandate to resource institutions or drive through a change in the law where in good times such reforms were likely to be foiled by interest group capture, or simply unlikely to get sufficient political traction. A crisis, then, is an opportunity for the well-prepared insolvency policymaker. Insolvency rule-making in crisis conditions is, however, plainly also risky. Making best use of the opportunity implies making more than temporary changes to the regime. But design choices made mid-crisis will almost inevitably be influenced by the features of the crisis itself, generating a risk that the result of the reform effort will be distorted law, ill-suited to the achievement of the lawmaker’s objectives in the long run. This paper considers the permanent restructuring law reforms enacted in the UK during the first wave of the Covid-19 pandemic. At first glance, these reforms appear to exemplify the case of the well-prepared policymaker, poised to drive through carefully planned changes to the law when the opportunity arises. On closer inspection, however, a different picture emerges. The permanent measures, which were enacted in a fast-track legislative process, departed from the Government’s pre-pandemic plan in material and undesirable ways. In some cases, these deviations mean that the original objective has not been achieved at all; in others, the objective has been at least partially achieved, but at unnecessary cost. Overall, the UK experience appears to better exemplify the risks of attempting insolvency law reform in a crisis, than the opportunities that a crisis affords to an insolvency policymaker.

van Zwieten, Kristin, Horst Eidenmueller and Oren Sussman, ‘Bail-Outs and Bail-Ins Are Better than Bankruptcy: A Comparative Assessment of Public Policy Responses to COVID-19 Distress’ (European Corporate Governance Institute, Law Working Paper No 535/2020, 8 August 2020)
Abstract: COVID-19 has severely disrupted the conduct of business around the globe. In jurisdictions that impose one or more ‘lockdowns’, multiple sectors of the real economy must endure prolonged periods of reduced trading or even total shutdowns. The associated revenue losses will push many businesses into bankruptcy. No public policy response can recover these losses. States can, however, act to reduce the amplification of the shock by the way in which they treat the cohort of newly bankrupt businesses. In jurisdictions where a well-functioning reorganisation procedure is capable of producing value-maximising outcomes in normal conditions, the temptation may be to subject this cohort to treatment by such procedures. This temptation should be resisted, not only because of the (significant) costs of these procedures, or because of concerns about institutional capacity to treat a high volume of cases, but also because such procedures are likely to be a poor ‘fit’ for the treatment of COVID-19 distress. In our view, the more attractive routes to relief are bail-ins (one-time orders to creditors or counterparties, or some class thereof, to forgive), bail-outs (offers to assume the debtor’s liabilities, or a class thereof), or some combination of the two. In this paper, we explain why a public policy response is necessary to mitigate the amplification of the shock caused by trading shutdowns, and compare treatment by the prevailing bankruptcy law with treatment by bail-ins or bail-outs along a range of dimensions. We conclude by tentatively suggesting some principles to help guide the choice between bail-ins and bail-outs, and the design of either form of intervention.

van Zwieten, Kristin, Horst Eidenmueller and Oren Sussman, ‘Corporate Restructuring Laws Under Stress’ (2023) 24(2) European Business Organization Law Review 201–205
Abstract: The proceedings of this special issue were written at a perilous moment for governments in Europe. These governments had responded ‘decisively’ to the risk that Covid-19-related trading shutdowns would lead to mass business insolvencies.Footnote1 That risk was not confined to leveraged businesses: in the absence of revenue, fixed operational liabilities could also push other businesses into insolvency once cash reserves were exhausted.Footnote2 States moved with extraordinary speed to suspend pre-pandemic rules of insolvency law that might otherwise have required a newly distressed debtor to file for the commencement of a collective insolvency procedure, and to restrict creditors’ ability to compel the commencement of such proceedings on grounds of insolvency.Footnote3 The underlying economic problem—fixed liabilities (financial and/or operational) and, at least for some sectors, a sudden loss of revenue—was then treated through some combination of bail-outs (transfers from the state to private debtors) and bail-ins (state orders cutting down on the entitlements of creditors of private debtors).

Vernea, Candit-Valentin, ‘Pandemic, Insolvency and Labour Relations: Current Challenges’ (2021) 52(3) European Journal of Social Law / Revue Européenne du Droit Social 81–89
Abstract: By means of this article, the author analyzes the effects of the new coronavirus disease, both from an economic perspective and from the perspective of the affected workforce. The article is structured in four parts. The first part aims to introduce the burst of the COVID-19 pandemic and its global effects. The second part analyzes the evolution of the insolvencies of the economic operators in Romania after the outbreak of the COVID-19 pandemic. The third part analyzes the methods used by most companies in their efforts to tackle the spread of the SARS-CoV-2 infection. The last part of the article, with a concluding role, presents the effects of the new coronavirus pandemic on the Romanian labour market.

Walters, Adrian, ‘The Small Business Reorganization Act: America’s New Tool for SME Restructuring for the COVID and Post-COVID Era’ (2020) 41(10) Company Lawyer 324–325
Abstract: Highlights the passage of the US Small Business Reorganization Act 2019 and its implications for corporate restructuring in the wake of the coronavirus pandemic. Reflects on its key provisions, its aim of facilitating consensual plans of organisation within short timeframes and at low cost, the significant role of the supervisory trustee, and the difficulties it is likely to face. :

Walton, Peter, ‘The Lawdragon, Covid-19 and Breathing New Life into Company Rescue’ (2020) 5 Wolverhampton Law Journal 58–62
Abstract: In these desperate economic times many companies are struggling to see a way through the maze of local and national trading restrictions. Many fundamentally sound businesses have become distressed due to the stop/start nature of trading conditions. There are about 2 million SME companies in the UK. SMEs employ over half of the working population. Their problems are problems for the nation. In this article, I will explain how I have used the accumulated expertise in insolvency law and practice to help put in place a new corporate rescue innovation, based upon a tried and tested procedure, designed to help save companies (and jobs) which are struggling due to the pandemic.

Wan, Wai Yee, ‘Governmental Responses Mitigating the Impact of COVID-19 on Small and Medium-Sized Enterprises and the Case for Insolvency Law Reforms in Hong Kong’ (2023) International Insolvency Review (forthcoming)
Abstract: The COVID-19 crisis has triggered unprecedented governmental responses around the world to mitigate the effects of the pandemic, with particular attention being given to small and medium-sized enterprises (SMEs). Governments around the world have implemented economic measures in the form of direct subsidies or government-guaranteed loans, and legislated to provide mandatory relief from contractual obligations. In addition, increasing recognition of the limitations of insolvency regime in addressing the crisis for SMEs prompted many jurisdictions to change their laws. However, consistent with its free market principles, Hong Kong has only adopted economic measures and has provided limited contractual relief in favour of SME tenants. There is no SME-specific insolvency law nor is the Hong Kong government currently considering any such law reform. This paper reviews the need for a temporary insolvency regime to cater to distressed but economically viable SMEs restructure their debts. Drawing on a set of interviews with Hong Kong SME owners, this author finds that they are often unaware of how insolvency law operates, their unsecured creditors are apathetic, and bankruptcy stigmatism is high. Based on a review of the frameworks in the other advanced common law jurisdictions such as the United States, Australia and Singapore, a recommendation for a simplified restructuring and liquidation framework is developed. The process is designed to be simplified and expedited and it incentivises early negotiations with creditors.

Wan, Wai Yee, ‘Should Hong Kong Reform Its Insolvency Law in Times of COVID-19?’ (2021) Company Lawyer (forthcoming)
Abstract: With the onset of the COVID-19 pandemic, the number of insolvency filings by otherwise economically viable firms globally is expected to rise significantly. Hong Kong will not be an exception. Hong Kong does not currently propose to enact legislation to impose a universal standstill of contractual obligations in response to COVID-19, as is the case in other jurisdictions. Once Hong Kong Monetary Authority’s (HKMA’s) measures for the banks to support the small and medium size enterprises (SMEs) and the Hong Kong Government’s economic relief packages come to an end, an enormous wave of defaults will come. The collapse of SMEs will have a serious impact in Hong Kong as SMEs account for 45% of the private sector total employment and 98% of all of the business establishments. The Hong Kong Government is proposing to enact legislative reforms to allow for provisional supervision and corporate rescue, which are out-of-court procedures, to facilitate restructuring if the major secured creditor consents. The proposed corporate rescue framework is long overdue. In recent years, many common law jurisdictions, including Singapore and the UK, have reconsidered and modernised their insolvency framework to include debtor-in-possession features in court-supervised restructurings that are based on Chapter 11 of the US Bankruptcy Code 1978 (Chapter 11). These features include an automatic moratorium or stay of proceedings and the ability to cram-down dissenting creditors not only within the same class but across classes of creditors. Further, specifically in response to COVID-19, several jurisdictions have enacted or are in the process of enacting insolvency legislation that allows SMEs and small businesses to access the bankruptcy or restructuring provisions more speedily. The question that arises whether even if the provisional supervision and corporate rescue framework is enacted, whether Hong Kong should make other more far-reaching reforms, particularly to its court-supervised restructuring framework. This article proposes that urgent consideration be given to simplify and modernize the insolvency and restructuring framework in Hong Kong. :

Wetlitzky, Tobias, ‘Water Under the Bridge? A Look at the Proposal for a New Chapter 16 of the Bankruptcy Code from a Comparative Law Perspective’ (2021) 37(2) Emory Bankruptcy Developments Journal 255–284
Abstract: In light of the ongoing COVID-19 pandemic, bankruptcy law will play a crucial role in addressing the consequences of the global economic shutdown. Many large corporations in the U.S. will need to undergo chapter 11 bankruptcy proceedings or may attempt to reorganize their financial debt in an out-of-court workout. However, section 316(b) of the Trust Indenture Act of 1939 has long been blamed for making out-of-court restructurings practically impossible, because it requires unanimous approval from bondholders. In 2014, the National Bankruptcy Conference presented a solution for the inefficiencies in bond workouts by proposing a streamlined debt reorganization procedure for borrowed money in a new chapter 16 of the Bankruptcy Code. This Article argues that now is time to take a new look at the 2014 proposal from a comparative law perspective. Considering the legal situation in England and Wales as well as Germany, the Article outlines a proposal for a modern workout mechanism for bond debt.

Zhang, Yang, Andrew Godwin and Stacey Steele, ‘China’s Covid-19 Response: The Role of Bankruptcy Law and “typical” Cases’ (2022) 22(2) Australian Journal of Asian Law 99–115
Abstract: This article examines responses to the Covid-19 crisis in China in the context of emerging corporate bankruptcy law and practice as demonstrated by the Supreme People’s Court selection and publication of eight ‘typical cases’ involving enterprises in financial difficulty during the pandemic. The article analyses the differences between ‘guiding’ cases, which have the greatest precedential value, and ‘typical’ cases and the potential for typical cases to affect the approach of lower courts to bankruptcy cases both during and after the pandemic, which coincided with a significant increase in the number of formal bankruptcy filings in China. We find that the courts claim an important coordinating role in the typical cases and openly apply the law as set out in the Enterprise Bankruptcy Law flexibly - with a focus on reorganisation-type proceedings - and that social stability remains a paramount objective. The strategic use of bankruptcy law as part of the response to the crisis and the publication of these cases by the Supreme People’s Court underscore the increasing sophistication of China’s corporate bankruptcy law and practice and the continuing role of the state in encouraging the use of debt workout and restructuring techniques within a robust, yet controlled, environment.

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