Expert advice for businesses in unprecedented times
COVID-19 RESOURCE HUB | Financier Worldwide
The shockwave caused by the COVID-19 crisis can already be felt. Individual industries and sectors have been hit in unique ways, with lasting consequences set to transform trade and commerce. The economic impact will be profound.
Business leaders are being challenged like never before. In their struggle to survive, many will fail. Those who hope to emerge on the other side of the pandemic will need to make the right decisions, based on reliable information and insightful advice. Throughout this crisis and in its aftermath, knowledge will be invaluable, underpinning successful strategy and execution.
Financier Worldwide’s COVID-19 Resource Hub aims to contribute to this knowledge base, bringing you expert commentary on tackling business challenges and seizing opportunities in these unprecedented times.
Q&A: Technology and the future of dispute resolution
FTI Consulting LLP
Even though e-discovery technology has become more prevalent, and courts have embraced the use of advanced technologies and analytics, many lawyers and judges have continued to insist on hard copy document productions in addition to electronic productions for use in the courtroom. Coronavirus (COVID-19) has been like a circuit breaker flipped on these processes.
Q&A: Rethinking commercial contracts post COVID-19
Financier Worldwide
The pandemic has brought commercial agreements into sharper focus and certainly has led many parties to have intense discussions about their agreements. We can expect parties to give more thought to circumstances in which their business may be severely impacted and how they want to manage that risk. Parties may give renewed consideration to boilerplate language.
COVID-19 and the types of disputes arising
Norton Rose Fulbright LLP
With national lockdowns, border closures and supply chain interruptions, businesses around the world have found themselves unable to fulfil their contractual obligations, whether that be the supply of goods, products or services. It is likely we are only seeing the tip of the iceberg as the real ‘storm’ of litigation is yet to come.
Remote investigations during COVID-19
Control Risks
Those with the best investigations and compliance infrastructure have been most resilient and adaptable. Much of the forensic technology space was already adapting to remote collection and investigation workflows, given the expansive use of cloud technology.
We must accept that our organisations will continue to be susceptible to cyber attacks – it is part of the cost of doing business. However, it is the organisations that demonstrate resiliency and adaptability that will continue to capitalise on opportunities as we move forward into a new way of working.
Q&A: Effective transfer pricing strategies in the COVID-19 era
DLA Piper and Skadden, Arps
Modelling, benchmarking and documentation are always important to both building and sustaining a consistent overall approach to global transfer pricing, and that fact has not been changed by COVID-19.
COVID-19: ethics and compliance considerations
Financier Worldwide
If the coronavirus (COVID-19) pandemic has taught us anything it is that ethical standards should not be compromised, especially at a time of considerable volatility and uncertainty. For companies under pressure to maintain their code of conduct, having recourse to an effective ethics and compliance function is essential.
COVID-19 and industrial manufacturing
Financier Worldwide
COVID-19 has had severe financial and operational consequences for companies of all sizes – and industrial manufacturers have not been spared. The pandemic has forced manufacturers to rethink risk management, contingency plans, workforce safety protocols, labour practices and operating processes, among others.
COVID-19: redefining lender and debtor relationships
Financier Worldwide
COVID-19 has had a profound impact on the economy, disrupting the operations of virtually every industry, with retail, energy, real estate, financial services, hospitality and transportation having been hit particularly hard. As a result, many companies are engaging in negotiations with their lenders and investors on a revised capital structure.
Financial reporting implications of COVID-19
MHA MacIntyre Hudson
Clarity of reporting will be key, particularly in narrative reports. Financial statements will need to be consistent from start to finish. The most complex and challenging areas will be ones involving discounted cash flow calculations or that are otherwise reliant on forecasts and estimations of future cash flows.
Expect to see a rise in stressed and distressed M&A transactions and for synthetic W&I insurance to play a key role. While insurers will expect more zoned-in due diligence to be conducted, some have mandated, or will require an exclusion around losses emanating from COVID-19.
Q&A: COVID-19 – challenges in distressed debt and liability management
Financier Worldwide
It is imperative that debtors understand their contracts and agreements with creditors and actively work with them to mitigate all potential damages – often through renegotiation. It is extremely important to know what you do not know. Familiarising oneself with securities laws goes hand in hand with management and board fiduciary duties to company stakeholders.
ROUNDTABLE: Risks facing directors & officers
Financier Worldwide
Companies and their D&Os should work together to scope the liability risks that the D&Os face globally and should then cooperate to ensure that appropriate protections are in place to mitigate those risks. Consulting with outside insurance coverage counsel and insurance brokers is important to making an accurate determination whether insurance coverage is adequate.
Energy private equity valuation in a COVID-19 world
Opportune LLP
The preparation of a thorough, market participant-based valuation analysis may require greater upfront cost and effort. However, it will almost certainly lead to a smoother audit process and more transparency to regulators and investors as financial managers assess the economic impact of the COVID-19 pandemic.
Strategic leadership in the age of COVID-19
Financier Worldwide
The need for strategic leadership has never been greater. For the safety of employees and the long-term survival of organisations, it is vital that senior management set the tone from the top, execute crisis management plans and communicate clearly and effectively with their stakeholders.
Q&A: Preparing for private equity exits: impact of COVID-19
Financier Worldwide
Under the given circumstances, nobody sells who is not forced to sell. Flipping a portfolio company following a refinancing and the distribution of a super dividend no longer presents a viable option. Rather, a ‘buy and build’ strategy is applied to create value. GPs are continuing to grow their healthy portfolio companies both organically and by way of ‘tuck in’ acquisitions when available.
ROUNDTABLE: Bankruptcy litigation
Financier Worldwide
The onset of COVID-19 has led to disputes between companies whose revenues have been severely affected and creditors who, in many cases, have gone unpaid. And with no substantial relief from the pandemic in sight, many anticipate a steady volume of corporate distress and bankruptcy filings, as well as extensive legal action, in the months to come.
As global financial markets recover from the COVID-19 crisis, limited partners, pension funds and family offices are pushing private equity funds and direct lenders to integrate environmental, social and governance considerations into their investments.
Reshaping the future: post-pandemic sustainability
Financier Worldwide
The current environment is sharpening the appetite for sustainability at local, national and global levels, compelling companies to develop and embed business practices to ensure they survive and prosper in a post-pandemic world.
Broken links: supply chain management amid global disruption
Financier Worldwide
The global nature of COVID-19 has brought considerable disruption to supply chains, with many suppliers severely restricted and others severed entirely. From point of origin to point of consumption, contemporary supply chains involve complex systems that can span the entire globe and are often rife with potential risks.
COVID-19: operational and supply chain risks in the healthcare sector
Financier Worldwide
For the healthcare sector, the disruption caused by COVID-19 has been particularly acute, relying as it does on PPE, ventilators, medicines and the like – products that have often proved to be the difference between life and death.
COVID-19: tackling cyber security challenges
Financier Worldwide
The legacy of COVID-19 is likely to leave organisations exposed to higher risks of cyber attacks for months if not years to come. Improved cyber security, better-integrated communications, automation and enhanced IT management are areas in which companies should consider making additional investments.
How COVID-19 is shaping global M&A
Financier Worldwide
Since the pandemic truly began to bite, global M&A has essentially dropped off a cliff. Dealmakers must prepare for a new reality by developing strategies and investment opportunities amid the COVID-19 experience to drive future success.
Labour and employment in the post-COVID-19 world
Financier Worldwide
The COVID-19 outbreak has had a transformational impact on companies, and will continue to do so for the foreseeable future. The coming of the coronavirus crisis sparked the biggest change in working practices in a generation, with entire workforces either furloughed, made redundant or sent to work remotely.
Impact of COVID-19 on M&A in the energy & utilities sector
Boston Consulting Group
The appetite for M&A is clearly still there with renewables. There is plenty of cash in the market and many are looking for opportunities to invest. A consolidation trend is expected, although the impact may not be that drastic.
Q&A: Managing antitrust risks amid COVID-19
Compass Lexecon
Antitrust definitely has a role to play in the response to the COVID-19 crisis, and authorities have responded with guidance on topics such as cooperation between competitors, and warnings about excessive pricing and exploitation of consumers.
Private capital is the oil in the engine: without it we cannot restart the economy
London Technology Club
Private investors, alongside government, will play a central role in getting the global, UK and London economy back on track after COVID-19. Private capital is the oil in the car engine, and without it circulating, the chances of a smooth recovery significantly diminish.
Making the case for Europe-Africa trade
British Arab Commercial Bank (BACB)
The trading relationship between Europe and Africa – that had been showing signs of great potential pre-coronavirus (COVID-19) pandemic – should play a crucial part in the regions’ economic recovery. The effects of the pandemic have been grave, but they could be short-lived if efforts are made to facilitate cross-border trade toward pre-crisis levels.
The burden of power: D&O liability in a crisis
Financier Worldwide
Although D&O exposures had already increased significantly in recent years, COVID-19 has amplified them, with decisions and actions now facing heightened scrutiny and potentially leading to potential claims of misrepresentation or negligent misstatement.
Disclosure issues in a COVID-19 context
Financier Worldwide
The financial and reputational consequences of failing to adequately disclose information can be significant. Every company required to do so must give ample thought to what information it should disclose and when. There could be serious consequences if disclosures made now are later found to be misleading or inadequate.
Banking on it: building a post-pandemic future
Financier Worldwide
The banking industry has a crucial role to play in helping the global economy weather the catastrophic impact of COVID-19 and get it back on the path to growth. Given the enormity of the challenge, banks can do much to help global economies navigate inevitable uncertainty over the months ahead.
Integrity and ethics in a crisis
Financier Worldwide
All companies should commit to core values, a code of ethics and a strong corporate culture on which they can rely. At times of crisis, those values should come to the forefront of company thinking.
Policy responses and paperless trade – how the trade finance industry has reacted to COVID-19
International Chamber of Commerce (ICC)
Without digital processes and documents, the ability to provide trade finance remains a challenge, as in-person contact, travel and shipping have all been heavily impacted by the restrictions imposed from efforts to limit COVID-19 transmission.
The COVID-19 crisis has had and will continue to have a significant effect on the three causal factors of the fraud triangle, setting the stage for a proverbial tsunami of fraud over the course of the next few years.
The coronavirus pandemic, practical steps to safeguard the organisation and its employees
Acuris Risk Intelligence
During this pandemic and the economic crisis that will likely follow, billions will be lost to online fraud. To best protect themselves, companies must advise their staff and customers of several steps they can take during these perilous times.
The COVID-19 crisis is expected to lead to a material decline in real estate prices. In a market where dynamics can change overnight, the pressure is mounting to stay in tune with these ever-changing conditions and to do so daily.
Rethinking business resilience
Financier Worldwide
The importance of business resilience has been brought into even sharper focus by the COVID-19 Financial resilience is critical, of course, but endurance also depends on an organisation’s governance, culture, strategy, risk and crisis management posture.
Managing reputational risk in unprecedented times
Financier Worldwide
The onslaught of coronavirus (COVID-19) has undeniably raised the stakes in terms of companies’ risk management strategies, bringing forth an entirely new reputational threat which companies must meet with a measured response.
Focusing a compliance programme on addressing the most significant risks to an organisation during and following this pandemic will help protect the business and allow companies to emerge post-COVID-19 on solid ground.
COVID-19 implications for transfer pricing
Financier Worldwide
It is clear that the COVID-19 crisis will have significant implications for companies’ existing transfer pricing arrangements, as well as carrying a financial reporting risk. Any company that ignores its TP issues could well be looking at an adverse adjustment, significant financial penalties or time-consuming litigation once tax authorities’ audits are launched.
Capital markets holding up under the weight of COVID-19
Financier Worldwide
Capital markets have a key role to play in helping to stabilise the economy. Going forward, it is vital that banks and investors provide funding and liquidity to ensure that credit markets continue to function.
Keeping the lights on – the impact of COVID-19 on the E&U sector
Financier Worldwide
Energy & utilities (E&U) is one of the many sectors severely affected by the outbreak of coronavirus (COVID-19), with the pandemic having a major impact on global energy markets and energy resilience. The biggest concern at this point for businesses is that there is no clarity on when things will normalise.
It is hard to find an industry that has not been impacted by the COVID-19 pandemic. This raises significant opportunities for acquirers to identify targets at favourable valuations. But short time frames will bring laser focus on quantifying the COVID-19-related EBITDA impact and assessing the damage to the target’s operating model, including whether the loss in value renders the pursuit a non-starter.
The impact of COVID-19 on domestic and cross-border M&A
Brown Rudnick LLP
Cash-rich buyers are well-positioned to take advantage of lower value targets, and activity in certain sectors remains strong by virtue of the nature of the crisis. But key issues are facing parties to an M&A process. In particular, there is a renewed focus on critical diligence items and certain deal terms.
Companies that have leveraged technology to improve the operations of their tax department through standardised business processes have been able to quickly and successfully adapt to the pandemic. Having a tax risk readiness plan allows the tax department to manage and monitor emerging risks, while creating and preserving value for the organisation.
Private equity activity in the COVID-19 environment
Sullivan & Cromwell LLP
Despite recent volatility in the capital markets caused by the outbreak of the novel coronavirus (COVID-19), financial sponsors and other private equity (PE) investors, including large family offices and sovereign wealth and pension funds, remain in active pursuit of investment opportunities across the capital structure and in a variety of industries.
Addressing the threats to their individual organisations posed by the COVID-19 crisis requires corporate board members' full attention. Although that effort takes top priority right now, boards will have no other option than to proactively continue to focus on ESG measures and reporting as well.
Impact of COVID-19 on the DIP financing market in the US
Cleary Gottlieb Steen & Hamilton
If DIP lenders continue to face defaults, they are likely to become more cautious in extending credit, particularly to industries and asset classes impacted by COVID-19. They may become hesitant to provide financing without more collateral cushion and a clear path to reorganisation.
Dealmaking appetite reflects a new post-COVID reality
Financier Worldwide
Companies are no longer operating in a sellers’ market and buyers are likely to dictate negotiations going forward. It remains to be seen exactly how the COVID-19 crisis will change the M&A industry, but buyers or sellers will need to quickly adapt to a new normal.
Manufacturing and COVID-19: limiting the impact
Financier Worldwide
COVID-19 is shaping global manufacturing leaders’ strategy when it comes to the management of people and processes. They are taking steps to change the way they manage their workforce or re-evaluating their current approach. At the same time, the speed of automation and digital transformation in the sector is set to increase considerably.
The value of ethics and compliance in a pandemic
Financier Worldwide
It would be easy for businesses, in these times of uncertainty, to overlook their ethics and compliance obligations. But it is imperative that companies continue to provide oversight, training and risk assessments across their business operations, even though these processes may be complicated by travel restrictions and lockdown orders.
Coronavirus risk management and response
SAI Global
The high severity, human impact and greater contagion effect the COVID-19 event poses necessitates the need for organisations to expand beyond traditional resilience planning strategies. Companies must review strategies, policies and procedures.
There has been a rapid increase in the number of companies actively looking to improve supply chain efficiency in the last month due to major breakdowns discovered during the COVID-19 period of disruption. The pandemic has uncovered underlying fault lines that were in place for some time.
Addressing the financial and operational challenges caused by COVID-19
BM&T European Restructuring Solutions
Many of the things we have taken for granted in the past have been severely disrupted by this crisis, and that is forcing innovation to compensate. Good businesses should have hope. The key is to be able to negotiate consensual arrangements with various stakeholders and stay out of any formal insolvency process.
COVID-19: leadership and strategy in a time of crisis
Financier Worldwide
A leader needs to have the ability to rally his or her team, project calm and empathy, take decisive action and, overall, communicate effectively. Businesses are depending on individuals who know how to transform uncertainty into tenacious thought, dejection into durability and, ultimately, stay strong during tough times.
Risk management: adapt or fail
Financier Worldwide
Business continuity planning may help mitigate some of the damage caused by the outbreak, but the scope of the crisis and the nature of response measures will certain be testing any plan to its limits. To optimise risk management, companies need to allocate resources to research and adopt new technology solutions.
COVID-19 highlights operational and supply chain risks
Financier Worldwide
As the virus spread across continents, nationwide lockdowns of non-essential businesses followed. While short- and medium-term disruption will be inevitable, even after the worst of the outbreak has passed and economies begin to reopen, COVID-19 is set to reshape global supply chains.
Bleak outlook for global trade
Financier Worldwide
Without a crystal ball, it is difficult to say with any certainty just how hard the COVID-19 outbreak will hit global trade. But, according to the latest update from the World Trade Organisation (WTO) in early April, the forecast is grim.
Global economy set for sharp contraction
Financier Worldwide
The global economy is projected to shrink by 3 percent, much worse than the contraction during the 2008-09 financial crisis, according to the International Monetary Fund (IMF) in its ‘2020 World Economic Outlook: The Great Lockdown’.
Companies need to be communicating clearly, often and honestly. There is a huge weight of expectation on business to do the right thing – by customers, employees and society as a whole. Not every big business is living up to these standards thus far.
Rethinking corporate bankruptcy frameworks in response to COVID-19
Financier Worldwide
As COVID-19 spread across the world, governments announced financial measures to support individuals and companies through the crisis. These include changes to existing bankruptcy laws in some jurisdictions to help companies stay afloat.
The impact of COVID-19 upon infrastructure projects, particularly in Asia, is likely to be far reaching. If your project has been impacted by COVID-19, there are some practical points to be aware of.
Credit insurance, Basel III and COVID-19
Norton Rose Fulbright
Manufacturers, suppliers and banks need to pay very close attention to the financial condition of their buyers and the conditions in the shipment destination and not ship goods if non-payment is foreseeable.
Exploiting fear, uncertainty and doubt: cyber security and COVID-19
Financier Worldwide
Organised crime groups are exploiting the fear, uncertainty and doubt which COVID-19 is bringing to target individuals and businesses in a variety of ways. Cyber attackers have changed their tactics to use COVID-19-related materials on health updates, fake cures, fiscal packages, emergency benefits and supply shortages.
The COVID catastrophe: labour and unemployment
Financier Worldwide
With more than 80 percent of a global workforce of 3.3 billion currently affected by full or partial workplace closures, until the pandemic eventually passes, the current outlook for labour and employment is bleak at best.
Outlook for global M&A
Financier Worldwide
As 2020 unfolded, the global M&A market experienced its slowest first two months of a year since 2005. The outlook for global M&A appears bleak for the foreseeable future. How the market rebounds from COVID-19 will be a deciding factor.
COVID-19 presents a stern test for the insurance industry
Financier Worldwide
Deteriorating financial conditions will trigger insurance claims across the industry, from event cancellation and business interruption to travel, health and life insurance, among others. In addition, as more companies collapse into insolvency, D&O claims will surely follow.
Financial services: flexible, agile, transparent
Financier Worldwide
Financial services firms must act decisively in response to the challenges that COVID-19 has posed. The sector will suffer due to the COVID-19 crisis, however it may be changed for the better through increased digitalisation and enhanced cyber security.
Is the construction sector close to crumbling?
Financier Worldwide
For the moment, the extent of the disruption across the construction sector, as well as its cost, is yet to be fully determined. Construction companies are doing their best to adapt to the ‘new normal’ and focus on what they can and cannot do in these difficult times.
Travel, leisure & hospitality on hold
Financier Worldwide
The travel, leisure & hospitality space has been left reeling by the coronavirus (COVID-19) pandemic. Across the globe, businesses are in lockdown, with a great many facing the prospect of never opening again.
COVID-19 puts retail on the ropes
Financier Worldwide
Given the magnitude of its impact, retailers need to adapt quickly to a vastly different environment in the short term, while keeping an eye on what COVID-19 means for the sector in the long-term.
In light of increasing threats, companies need to take steps to identify unusual or suspicious behaviour, investigate it thoroughly and, where appropriate, report it to the relevant authorities.
Furloughing during the COVID-19 crisis
Bellevue Law
Although on the surface furloughing staff may seem like the best option and a win-win situation for all, digging deeper shows some challenges. Each business will need to adapt to what works best for them, but they should not forget that no business exists without its staff.
Recent weeks have revealed how unprepared some businesses and governments are to respond to a pandemic scenario. Inadequate digital infrastructure and planning have weighed down business leaders trying to act decisively in response to the disruption, sending tremors up and down global supply chains.
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