Multinational boards are facing a major dilemma in response to COVID and its impact on their business forecasting. Many companies are facing insolvency and are left to decide how to approach bankruptcy proceedings. We're joined by bankruptcy attorney and expert, Edward Tillinghast, to explore what companies can do to protect themselves as they face unprecedented levels of bankruptcy filings and lawsuits.
Edward Tillinghast is a partner and Practice Group Leader of Sheppard Mullin's Finance and Bankruptcy Practice Group. He specializes in U.S. and cross-border insolvencies, particularly involving Asia, Latin America, and other emerging and developing markets, and related creditors' rights litigation.
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What We Discussed in This Episode:
- What do board members have to think about when it comes to filing for bankruptcy in these COVID times?
- How is the economic fallout from COVID different from that of the Great Recession?
- Is there a shift in board fiduciary duties when a company is insolvent?
- Can there be criminal liability for board members and officers for breach of fiduciary duties as a company goes through insolvency?
- What are the various ways companies can protect their directors and officers if there are lawsuits for breach of fiduciary duties?
- Why is it important to have different types of advisors like legal and financial advisors present at company board meetings?
- How did the shift in consumer buying habits lead to the bankruptcy filings early in 2020 prior to COVID?
- Will there be a change in corporate behavior going forward?
- Is there likely to be a rush of bankruptcy filings in the near future and will that slow down the court system?
Resources Mentioned:
"Precautionary and Prudency Measures for Boards Addressing COVID-19 Business Uncertainties," Finance and Bankruptcy Law Blog, April 10, 2020
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