COVID-19 NEWS

ARQIS COVID-19 NEWS

The Coronavirus has a firm hold on us. By now, there is probably no one who has not felt the impact of the private and/or economic restrictions.

All of us at ARQIS have reacted and adapted our work processes, so we can advise and support you as usual. As an additional service, we are providing you with the latest information on Covid-19.
This is designed specifically for companies and will inform you regularly about the latest decisions, measures, restrictions and options on Covid-19.
We are sure that you too will profit from this information. And should you have any questions or suggestions: Just call us. The ARQIS team is there for you – even working from home.

COVID-19 pandemic as an opportunity to conclude legal disputes by settlement

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Many businesses are busy labouring amid the economic turmoil of the COVID-19 pandemic. Aside from the difficulties of operative business, companies currently entangled in ongoing legal disputes face another special challenge. In these difficult economic times, businesses lack the human and financial resources to pursue expensive, time-consuming litigation while having to set aside maximum cash reserves. So it is no surprise that many companies are asking themselves whether now would be a good time to wrap up pending legal disputes by reaching a settlement.

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Coronavirus on decline – an interim evaluation under data protection law

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The past ten weeks have put the entire population to the test. Many have themselves fallen ill with corona, or one of their close ones has. Most citizens have, however, experienced the past weeks without health constraints, but with restrictions in their daily lives. Nevertheless, the corona crisis can, without cynicism, be seen as an opportunity to “build a Germany with more freedoms and, above all, to use investments in such a way that sustainable economic strength and growth can be achieved”, as Annegret Kramp-Karrenbauer recently pointed out in an interview with the news service n-tv.

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UPDATE: A voucher system is now law, providing relief to event organisers, gyms and other establishments in the coronavirus crisis

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The Act to Mitigate the Consequences of the Covid-19 Pandemic under Event Contract Law, European Company (SE) Law and European Cooperative Society (SCE) Law, which was passed on 20 May 2020, provides relief to sports and concert event organisers and establishments which are suddenly facing numerous reimbursement claims as a result of cancellations due to the Covid-19 pandemic. Permitting them to offer credit in the form of vouchers to consumers rather than cash refunds helps to protect them against the massive financial impact of the coronavirus.

The legal aspects of whether a promotor has an obligation to reimburse the cost of tickets for a cancelled event will have to be reviewed on a case-specific basis, and there can be no blanket solution. In many cases, however, the promotors will have that obligation, which is why vouchers offer them a viable means of avoiding potential liquidity squeezes.

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Business acquisition from the seller out of the crisis – risk minimisation by Corona?

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The acquisition of a business from a seller threatened with insolvency involves a high risk for the buyer: In the event of a subsequent insolvency of the seller, the buyer is threatened with a total loss of his investment if the insolvency administrator successfully contests the transaction. The legislator has minimised this risk – albeit possibly unintentionally.

In the worst case, what appears to be a bargain at first glance can turn into a nightmare. A company run into financial difficulties has to disinvest from a subsidiary or a part of a business to generate liquidity. The pressure on the seller’s side is often high in such situations, resulting in a low purchase price. If a deal is reached, both sides are satisfied: The seller has solved his liquidity problem, the buyer has bought at a favourable price. However, if the inflow of liquidity is not sufficient to permanently overcome the seller’s crisis, the buyer is at risk of losing his entire investment.

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Financial aid for start-ups – Pillar 1: KfW Capital launches application process for ‘Corona Matching Facility’

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At the beginning of April, Federal Minister for the Economy Peter Altmaier and Federal Minister of Finance Olaf Scholz announced an aid package for start-ups, whose first stage (Pillar 1) aims to support larger new businesses that have already received or are set to receive financing from venture capital funds. This ‘Corona Matching Facility’ or ‘CMF’ is now being set in motion.

From now on, venture capital funds (‘VC funds’) can apply to the Kreditanstalt für Wiederaufbau (‘KfW’) for co-financing via its subsidiary KfW Capital GmbH & Co. KG (‘KfW Capital’), so that they can keep supplying German start-ups with sufficient funding. Applications can apply retroactively to include finance provided after 2 April 2020.

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Suspending company pensions in the Schutzschirmverfahren – liquidity at the expense of pensioners?

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The coronavirus crisis is placing businesses in considerable financial difficulty as they lose sales, while many costs remain the same. In crises like these, some businesses are naturally forced to resort to aspects of insolvency legislation such as the Schutzschirmverfahren or ‘umbrella procedure’, a special form of self-administration under German insolvency law. The umbrella procedure described in § 270b of the Insolvenzordnung (German Insolvency Code) is a kind of self-administration for the purpose of preparing for insolvency proceedings before they actually begin. If a business applies for the opening of insolvency proceedings in self-administration, the insolvency court has to grant it up to three months to draw up an insolvency plan. The insolvency court appoints a preliminary custodian for this three-month preparatory period.

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The KfW student loan – an emergency scheme for students in the coronavirus crisis

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A new source of emergency funding is an appealing option for German students. The loan has a zero interest rate until 31.3.2021 as a result of the coronavirus crisis and can be applied for now.

The current pandemic is causing hardships for both businesses and employees. Student employees have been particularly affected because a lot of young people finance their studies either partly or entirely with a part-time job. Without the income from that part-time job, the money situation for many students has become critical and some are even considering dropping out of university.

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Air passenger rights: consumers don’t have to accept airline vouchers!

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Consumers and businesses in Germany are not under any obligation to accept a voucher instead of a refund as compensation for a cancelled flight. The legislation that the German government had been planning to introduce allowing airlines to offer vouchers instead of refunds has now been put on ice after it was vetoed by the European Commission.

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Liability of Boards of Directors and Managing Directors

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I. Introduction

The Coronavirus pandemic has its hold on the economy, impacting companies of all sizes. In the process, managing directors and boards of directors are tasked with taking management decisions during this crisis, which means that they are confronted with the difficult challenge of navigating companies through turbulent waters. The progression and economic impacts of the pandemic are hard to predict. Forecasts are changing continually. Decisions are forced to be taken on a precarious factual footing. Business decisions could in retrospect prove to be adverse to the company.

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