The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on the USA:
1) When does a company need to file for insolvency in the USA?
In the US, bankruptcy or insolvency law is governed at the federal level through the Bankruptcy Code. Pursuant to the Bankruptcy Code and different from many other countries, a debtor is generally not obligated to commence a bankruptcy proceeding due to financial distress or illiquidity. Specifically, a debtor (“voluntary petition”) or a creditor (“involuntary petition”) may commence a bankruptcy proceeding. MORE
2) What liability risks exist for the management in the USA in a corporate crisis?
Due to the COVID-19 pandemic, management of US companies face various liability risks, including health and safety of employees and other individuals along with compliance with continuing contractual obligations. Concerning individual liability risks, management may face claims by employees suffering illness or other negative effects to their health due to insufficient policies or measures for protection from COVID-19. MORE
3) Is there any state aid available for companies in the USA due to the Corona crisis?
Following the outbreak of the COVID-19 pandemic, the US Congress has been working on stimulus legislature to provide aid to individuals as well as certain industries. While this legislation has yet to be ratified, the current scope would include 100 billion US Dollars in assistance for hospitals, 350 billion US Dollars in assistance to small businesses, 500 billion US Dollars in aid for companies in effected industries, including airlines and cruise lines: MORE
4) What immediate measures should a company in the USA take if it is affected by the Corona crisis?
In addressing the COVID-19 pandemic, management of US companies must ensure the safety and health of its employees as well as any other relevant individuals, while attempting reduce the economic impact on its operations. In particular, management should implement policies based on the guidelines of the Center for Disease Control (CDC) as well as regionally applicable governmental orders, such “Stay at Home” or “Shelter-in-Place” proclamations: MORE
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