Webinar - Relief from Financial Distress in 2020: Some options for Businesses, Directors & Guarantors in the face of COVID-19

As the recent measures announced on 21 April 2020 are implemented, keeping afloat in deepening waters is proving to be a greater challenge.

It has been about 4 months since COVID-19 first started to get our attention. Since then, business owners have been doing their best to comply with tight safety measures and control orders, while keeping revenue pipelines moving, preserving talent and relationships, and managing cashflow. As the recent measures announced on 21 April 2020 are implemented, keeping afloat in deepening waters is proving to be a greater challenge.

The legal rights of contracting parties vary to different extents, reflective of risk allocations in a world without COVID-19. This has now changed. Businesses have to adjust priorities. As the effort is made to swim to shore, how will we stay afloat and who will we bring with us?

Consider this scenario: Alice and Bob are directors of Company V. In December 2019, they agreed to supply materials for Carol’s house renovation project. Since February 2020, Carol has not paid them for completed work. Alice and Bob have a string of creditors to pay. They are also due to deliver materials to another project on 4 May 2020.

• What are Alice and Bob’s duties as directors? Can they press Carol for payment? Do they still have to deliver materials?
• Can they pay creditors who are friends and ignore others? Can they borrow money from Chuck to tide them over? What if Chuck’s money is used to pay their salaries and not creditors?
• What can creditors do recover debts from Company V?
• After COVID-19 measures are lifted, will Company V face a cascade of debt? What plans will they need to have in place to weather the eventual storm?

In this session, Nigel Pereira, Partner at RHTLaw Asia will:

• Provide an introduction to the relief mechanisms offered under the COVID-19 (Temporary Measures) Act and the regulations which were recently gazetted on 20 April 2020.
• Look at the types of obligations which may be suspended during the relief period (i.e. between 20 April 2020 and 19 October 2020) and the types of obligations which are enforceable outside the relief provisions.
• Touch on risks which our counterparts are facing and the options available in relationships with debtors and creditors.
• Discuss what can be done today to prepare for the months after COVID-19.

About the speakers

Nigel Pereira, Partner, RHTLaw Taylor Wessing

Nigel Pereira is a Partner with RHTLaw Asia’s Litigation & Dispute Resolution Practice and specialises in Insolvency, Restructuring & Work-Outs with an emphasis on investigations and cross-border asset recovery. He has advised insolvency practitioners, audit and governance professionals, investigators, corporates, directors, shareholders and individuals on insolvency risk and options, debt management and restructuring, asset tracing and injunctions, investigations and data privacy, employee breaches, fraud risk and incident response, anti-corruption and anti-money laundering. He has also advised landlords, joint-venture partners and parties in family and succession disputes.

Nigel is a Certified Fraud Examiner (ACFE) and a member of the Chartered Institute of Arbitrators (CIArb) and INSOL international. He is an afflilate of the Society of Trust and Estate Practitioners (STEP). He also holds certification in IT risk, governance, security and computer forensics and is a Certified Blockchain Professional (IIB).

Erwan BARRE, Partner, RHTLaw Taylor Wessing 

Erwan Barre is a Partner (Foreign Lawyer) at RHTLaw Asia and Co-Head (Corporate & Capital Markets Practice). He has extensive experience representing clients across many industries, emphasising on Technology and Life Science. He is a co-founder of Vaximax, a biotech company. Erwan has been involved in many M&A, joint venture, capital markets and financing projects in Asia, Europe and the US. He has led over 80 deals, representing more than US$20 billion. 15 of his deals exceeded US$500 million in value. 60% of his transactions involved TMT and life science companies. He has also represented clients in aerospace, real estate, hospitality and energy, from promising start-ups to blue chip names and investment banks.