The ongoing Coronavirus (COVID-19) crisis increases the duties and, thus, the potential liabilities of managers. They are required to make themselves familiar with new laws and economic support packages which have been put in place in light of the COVID-19 crisis in order to restructure/protect the managed business. Managers should also carefully check whether and to what extent they can rely on the newly provided suspension of insolvency filing obligations and payment prohibitions. Even if such eases apply, managers must still comply with the general rules applicable in case of an illiquidity/over-indebtedness. In particular, without limitation, entering into new contracts and/or placing orders though the payment of the consideration is at risk could constitute a fraud. In any event, even if an insolvency filing obligation is suspended, managers should find ways to cure an illiquidity/over-indebtedness as soon as possible and compare these options also with an in-court restructuring using the special restructuring tools available in the course of insolvency proceedings.
Read the full article in German here.
