By Andrew Hack, Solicitor, and Stephen Mullette, Principal, of Matthews Folbigg Lawyers, in our Insolvency, Restructuring and Debt Recovery Group.
This month, the World Health Organisation declared COVID-19, also known as the Coronavirus, a pandemic. Governments are responding by placing travel bans and quarantine orders on people coming into and leaving the country. Businesses are responding by closing premises and making arrangements for employees to work from home. Some are even closing down entirely.
On Sunday 22 March 2020, the Prime Minister announced new lockdown measures forcing pubs, cafes and restaurants to close with exception to takeaway. Other businesses to close are cinemas, casinos, nightclubs, gyms and indoor sporting venues.
As the virus continues to spread and the global death toll increases, the full impact that COVID-19 will have on the economy is yet to be known. Australian stocks continue to plummet and very recently, ratings agency Standard & Poor’s forecast a global recession in 2020. It is reasonable to consider that over the coming months there will be many companies and businesses suffering from the conditions brought about because of COVID-19, many of which will ultimately end up insolvent and in external administration.
The Australian Government has introduced a set of bills to parliament to attempt to address the economic impact of COVID-19, which includes cash payments to individuals and businesses, relief against liability for insolvent trading, tax relief and restraints on creditor enforcement action.
You can read the bills here.
Over a number of blogs Matthews Folbigg Lawyers will be keeping track of the legal issues in respect of insolvency matters in the wake of the new economic climate.
Click here to access the next article on director’s obligations.
If you would like more information or advice in relation to insolvency, restructuring or debt recovery law, contact Andrew Hack at andrewh@matthewsfolbigg.com.au or a Principal of the Matthews Folbigg Insolvency, Restructuring & Debt Recovery Group:
Jeffrey Brown on (02) 9806 7446 or jeffreyb@matthewsfolbigg.com.au
Stephen Mullette on (02) 9806 7459 or stephenm@matthewsfolbigg.com.au.
