The Insolvency Review: Editor's Preface
As with prior editions of The Insolvency Review, this ninth edition includes in-depth information regarding current market conditions and insolvency case developments in a number of countries. Because of the ongoing covid-19 pandemic, we owe more than the usual debt of gratitude to the outstanding professionals around the globe who annually dedicate their time and talents to this book. Their contributions reflect the diversity of their respective national commercial cultures and laws, and, for the past two years, the disparate impact of covid-19 around the world.
I had hoped that by this time we would have greater visibility into the impact of the pandemic on national economies, but while we know more today than we did last year and have vaccines that seem to be effective against the viral variants to date, countries have faced repeated setbacks due to the evolution of the virus, limited access to vaccines in some places and resistance to vaccination and mitigation measures in others. As a result, the adverse impact of the pandemic on the health and livelihoods of so many around the world continues.
This adverse impact has of course been blunted by fiscal stimulus, payment moratoria and the temporary suspension of director liability for ongoing trading in a number of countries, and insolvency activity in many countries has consequently been lower than expected. However, as time goes on the financial stresses temporarily suppressed by economic relief measures continue to build, and concern grows over what will happen when relief measures expire. This has led to repeated extensions of relief measures in a number of countries despite the recognition that these measures cannot remain in place forever.
It seems senseless for there to be mass evictions of residential and business tenants and the failure of numerous businesses – especially small and medium-sized businesses that were viable before the pandemic – when temporary relief measures expire. The question is whether there is a way to mitigate the longer term economic impact of the pandemic so tenants and businesses can survive the crisis and be restored to financial health, thereby preserving their income-generating capacity and jobs. Some have suggested that solutions like permanent relief from pandemic-related rent arrears and the creation of 'emergency restructuring entities' to facilitate business restructurings and channel public and private funds to viable businesses should be considered.
The economic costs of the pandemic will have to be borne by consumers, investors, employees or taxpayers. The policy question is whether these costs can be minimised and made more sufferable by creating mechanisms that spread their absorption in a more orderly and equitable way.
As I do each year, I want to thank the contributors to this book for their efforts to make The Insolvency Review a valuable resource. As each of our authors knows, this book is a challenging undertaking every year, and is particularly so during the pandemic. We have far less visibility into what is really going on in the global economy and where things are headed. Nevertheless, my hope is that this year's volume will help all of us, authors and readers alike, reflect on the larger picture, keep our eye on likely, as well as necessary, developments and point to better ways to address the adverse financial impact of the current crisis.
Donald S Bernstein
Davis Polk & Wardwell LLP
New York, USA