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01 October 2020 / Monica Barton , Lorène Sani , Delphine Zhuang
Issue: 7904 / Categories: Features , Covid-19 , Insolvency , Commercial
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Financial liquidity and business restructuring in the wake of COVID-19

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By Monica Barton, Lorène Sani and Delphine Zhuang of international law firm Winston & Strawn

In brief

  • Government-backed funding measures.
  • Beyond government schemes.
  • Cross-border applications.
  • Avoiding insolvency.

The protracted impact of COVID-19 on financial liquidity is due to reach an inflection point for European businesses. As lines of credit reach their limits and businesses begin to assess the long-term damage from a global lockdown, restructuring will be a priority discussion.

Businesses will have to make difficult decisions, identify available funding and assess the role that private capital will play. As restructuring commences, it will be crucial to understand the effect on cross-border applications. And finally, when companies have exhausted restructuring options, is there a path back to liquidity whilst avoiding insolvency?

Government-backed funding measures

Firstly, businesses in need of cash will still be able to apply for State-backed loan schemes. The Government has issued a series of public support funding measures since the start of the COVID-19

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