破产与重组:全球大流行病如何改变了破产规则

Insolvency and restructuring legislation changed radically in all jurisdictions in the wake of COVID-19. While governments have tried to delay the number of insolvencies in the short term, most experts agree that distressed businesses will start to fail significantly later this year and into 2021.

For insolvency practitioners and lawyers alike, the pandemic has posed problems that have not been seen on a global scale in more than 100 years. Many businesses have faced sudden and catastrophic closures along with the evaporation of their revenue as emergency lockdowns have been implemented across all jurisdictions in an attempt to control the virus.

And now as lockdown measures have eased around the globe, those companies still functioning may well be tipped over the edge into insolvency by the loss of trade during and post the pandemic. No surprise then that later this year, the number of company insolvencies and liquidations is predicted to soar.

This provides the challenge for insolvency professionals; how to retain value and restructure decent businesses that were robust and profitable before March, while allowing zombie businesses to naturally fail?

Around the world, governments are eager for insolvency professional to restructure failing businesses rather than liquidate them – and this could be crucial in the coming months and years. Consequently, governments in different jurisdictions have hastily introduced legislation to help preserve businesses and stop them slipping into insolvency, issuing a number of measures such as state loans, staff furlough schemes and tax breaks.

Because of these measures, the number of company insolvencies and liquidations dropped dramatically during lockdown in all jurisdictions while businesses temporarily closed their doors. But insolvencies have gradually crept up as lockdown has eased, although these are still appreciably down year-on-year. For example, there were 955 company insolvencies in England and Wales in July, comprising 590 creditors’ voluntary liquidations, 166 compulsory liquidations, 182 administrations and 17 company voluntary arrangements, according to The Insolvency Service. But this was 34% down on the July 2019 figures.

While the exact moment of an anticipated increase in company failures is a matter of conjecture, experts in the industry agree that it is only a matter of time. Those measures to assist businesses to get through the lockdown – for example, in the UK companies have been able to furlough employees while the government agreed to pay 80% of their wages – are starting to come to an end. This will remove the safety net that many businesses have been hanging onto for the past few months.

It also means that creditors, who have had to be patient for the past few months, may become more aggressive with their demands for action on debtors.

Insolvency and restricting legislation varies markedly around the world; while some have evolved progressive regimes that focus on restructuring and rescuing value, others are more punitive. For example, ‘light touch’ administrations have been introduced in several jurisdictions but there are fears they may go too far and give too much power back to directors of ailing companies.

Elsewhere, new insolvency legislation had been instituted in various jurisdictions before the pandemic, but this has yet to be tested and means that businesses will need the guidance of specialists in their fields more than ever before.

The dilemma of trying to keep trading while staving off insolvency is likely to be one faced by many companies in the coming months. But the key for any business in financial trouble – as it is in any time – is likely to be to seek help at an early point when a restructuring is more likely to be successful and the value in the business is not lost.

The following discussion took place between IR Global members from four countries who are experts in company insolvency and restructuring. Their wide-ranging discussion addresses several issues including new legislation allowing restructuring over insolvency, whether ‘rushed through’ insolvency measures address both large enterprises and small and medium-sized companies and whether ‘light-touch’ administrations give too much power back to directors. Their responses demonstrate the differences that exist across the world.