Due to financial distress, many businesses have been experiencing, the Government made the decision back in March to relax the rules regarding bankruptcy and insolvency. These relief measures essentially made it much harder for creditors to pursue outstanding business debts, leaving creditors unable to issue bankruptcy notices to any businesses owing debts under $20,000.
Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!
Q2 2020 hedge fund letters, conferences and more
Under normal circumstances, each company director has a strict duty to cease trading immediately if theyre insolvency is looking likely, with them facing financial liabilities as well as legal problems if they continue to seek finance. The government introduced time-limited emergency coronavirus legislation that suspends the threat of liability for wrongful trading. The notice period for creditors to act on outstanding debts has also been extended, which actually allows many companies to continue trading without paying loans, taxes, and even rent.
Most investors are aware of Warren Buffett's most high profile long-term investments. However, there is one long term investment that is often overlooked. Q2 2020 hedge fund letters, conferences and more This is building materials maker USG, which was owned by Berkshire Hathaway for more than 17 years before it was acquired in 2018. If Read More
Take Melbourne for instance, these changes were originally set to finish at the end of September, but with further lockdowns in place, many commentators have been predicting that these changes would have to be extended in order to give businesses the chance to trade themselves out of insolvency. In fact, the need for this support for businesses has only intensified as we begin the next stage of recovery.
Firms that are attempting to adjust to this new normal will be faced with steep costs alongside limited revenues. Without these insolvency protections in place, we will most likely see some entirely preventable company collapses, putting both our economic recovery and many thousands of jobs at risk. Company directors are doing whatever they can to ensure they survive the crisis, and certainly should not be penalized for acting responsibly amid these unprecedented circumstances.
Many have argued that these emergency measures should be extended to aid the economic recovery from the pandemic and to safeguard jobs. Thats why the Federal Government has ultimately decided that these temporary rules regarding bankruptcy and insolvency protection due to COVID-19 would be extended until the end of this year.
While all of this will certainly provide many businesses with a lifeline to help them recover from the impact of this pandemic, there are some businesses that will still, unfortunately, end up in voluntary administration when the new year rolls around. Commentators have already warned that these protections have caused a sharp decline in insolvency proceedings over the past few months, with insolvencies down over 60% compared to the same time last year.
The current decline in the number of voluntary administrations is already creating a backlog, and any rise in corporate insolvencies will also see an increase in unemployment across the board, as well as a decline in business and consumer confidence. This also means that there will no doubt be a number of zombie businesses that are already being kept artificially afloat due to these protections, so this extension will most likely only add to that number.
Creditor advocates have also warned that extending these insolvency measures would also damage their industry. That being said, it still remains to be seen whether this will simply defer the anticipated insolvency spike resulting in a tsunami of future liquidations in the new year, or if it will afford these struggling businesses the time they need to trade themselves out of insolvency.
In any case, most businesses will relish this extension, as it provides them additional time for them to do what they can to get their trading closer to what it would be normally. But business owners should definitely not allow themselves to become complacent in any way. Because, while these temporary changes provide some much-needed relief, they must be laser-focused on repaying debts before 2021 if they hope to avoid dealing with impending insolvency proceedings.
While recovery from the COVID-19 pandemic has already started, we are certainly not out of the woods yet. Some businesses around the country are beginning to emerge from the coronavirus, but there are many small firms that are normally successful in perilous positions.
Read the original here:
Are Protections Keeping Zombie Businesses Artificially Afloat? - ValueWalk
- 'Dawn of the Dead' at 45: A Zombie Love Affair That Never Died - The New York Times - April 12th, 2024
- Hyper-sexual 'zombie cicadas' infected with bizarre STD fungus will emerge in US - New York Post - April 12th, 2024
- Zombie malls and other retail centers getting extreme makeovers to keep up with the times - Chicago Tribune - April 12th, 2024
- 'Zombie' drug xylazine found in cannabis THC vapes in UK - BBC.com - April 12th, 2024
- Taxing health insurance: The Republican zombie that refuses to die - Roll Call - April 12th, 2024
- Fungus-infected Zombie Cicadas with hypersexuality to emerge in the US this year: Expert - Hindustan Times - April 12th, 2024
- Zombie Classic Dawn Of The Dead Coming Back to Theaters for 45th Anniversary - MetalSucks - April 12th, 2024
- E-News | 'Zombie cicadas' infected with sexually transmitted fungus expected to emerge this year in parts of US - WVU ENews - April 12th, 2024
- Deadly Zombie Sedative Penetrating The U.K.s Illicit Drugs Market - Forbes - April 12th, 2024
- Seattle Police warn that base ingredient in 'zombie drug' tranq is being sold as standalone pill - FOX 13 Seattle - April 12th, 2024
- Opinion | Today's Opinions: Haunted by zombie law and thrown into abortion time-travel - The Washington Post - The Washington Post - April 12th, 2024
- Rob Zombie Teases 'House of 1000 Corpses' Book With Rare Photos, Original Script and More! - Bloody Disgusting - April 12th, 2024
- Zombie malls getting extreme makeovers to keep up with the times - Detroit News - April 12th, 2024
- 2000s Horror Fantasy Is One Of The Most Unique Takes On The Zombie Genre - Giant Freakin Robot - April 12th, 2024
- Mysterious 'Zombie Neurons' Unlock Secrets of Learning in The Brain - ScienceAlert - April 12th, 2024
- Zombie SKUs: What They Are, How They Work & Results - JumpFly PPC Advertising News - April 12th, 2024
- Arizona Reviving Its Zombie Abortion Ban Is Trump's Doing - The Cut - April 12th, 2024
- Hyper-sexual "zombie cicadas" that are infected with sexually transmitted fungus expected to emerge this year - CBS News - April 12th, 2024
- Should we be concerned about zombie cicadas? - WGN Radio - Chicago - April 12th, 2024
- You need to play this underrated zombie shooter before it leaves Xbox Game Pass - Digital Trends - April 12th, 2024
- End the 'zombie' Comstock Act - Star Tribune - April 12th, 2024
- OPINION - Flesh-eating zombie narcotics are on our streets Britain is badly losing its war on drugs - Yahoo News UK - April 12th, 2024
- What Is Xylazine - The Flesh-Eating 'Zombie' Drug Linked To 11 Deaths in The UK? - Times Now - April 12th, 2024
- Zombie Cicadas To Emerge In Virginia: What To Know - Patch - April 12th, 2024
- What Is "Zombie Drug" Gripping The UK? - NDTV - April 12th, 2024
- OJ Simpson's Final Film Will Resurrect His Naked Gun Character - As A Zombie? - Looper - April 12th, 2024
- Flesh-eating 'zombie drug' sweeping US is linked to 11 UK deaths - The Telegraph - April 12th, 2024
- Flesh-rotting 'Zombie drug' tranq raises alarm in UK - The Times of India - April 12th, 2024
- Zombie Cicadas To Emerge In GA: What To Know - Patch - April 12th, 2024
- What was the first-ever zombie movie? - Far Out Magazine - April 12th, 2024
- Even Will Smith Couldnt Save Zombie Survival Game Undawn, Which Flopped Spectacularly - IGN - March 24th, 2024
- Rob Zombie Recommends This Surprisingly Wholesome Comedy - Dread Central - March 24th, 2024
- Army Writing and the Zombie (Noun) Apocalypse - Modern War Institute - United States Military Academy West Point - March 24th, 2024
- Fatal Fury's Mai Shiranui Is In This Zombie Survival Game For Some Reason - Time Extension - March 24th, 2024
- Should you be worried about 'zombie deer'? | College of Public Health - George Mason University - March 24th, 2024
- 'Scooby-Doo on Zombie Island' Scares Its Way to Blu-ray for the First Time This Spring - Collider - March 24th, 2024
- Rob Zombie hates my guts: GWAR's Dave 'Oderus Urungus' Brockie was a genius, and here's an interview that proves it - Louder - March 24th, 2024
- In the fight against gun violence, Rep. Frost Introduces the Destroy Zombie Guns Act - The Apopka Voice - March 24th, 2024
- Elfriede Jelinek's 'The Children of the Dead' is a historical zombie novel - The Washington Post - The Washington Post - March 24th, 2024
- Germany's Zombie Government Is Fueling the Far Right - The Atlantic - March 24th, 2024
- Zombie Survival Game Undawn Has Crashed And Burned According To A Reuters Report - MMOs.com - March 24th, 2024
- Will Smiths Zombie Game Has Been Hit Harder Than Chris Rock at the Oscars Its Astronomical Budget Was ... - imdb - March 24th, 2024
- Scooby-Doo On Zombie Island / Return to Zombie Island Blu-ray (Warner Archive Collection) - Blu-ray.com - March 24th, 2024
- Registration almost here for Dothans annual Zombie 5K Chase - WDHN - March 24th, 2024
- Zombie magic and gambling club Magic Island will come alive again this summer - Houston Chronicle - March 24th, 2024
- Undawn | The $140m zombie survival game starring Will Smith that bombed while nobody was looking - Filmstories - March 24th, 2024
- After 4 years, a cult classic zombie horror manga from Ga-Rei's creator is finally getting an official English release - Gamesradar - March 24th, 2024
- Will Smith's Zombie Game Has Been Hit Harder Than Chris Rock at the Oscars - Its Astronomical Budget Was ... - FandomWire - March 24th, 2024
- "The game literally no one knew existed": The Will Smith Zombie Survival Game is Reportedly a Big Flop and Fans Are ... - FandomWire - March 24th, 2024
- Zombie-palooza --- Get to the biggest undead music event in the latest Dead Island 2 expansion: SoLA - Gaming Trend - March 24th, 2024
- Bournemouth University medical students treat 'zombie attack' in mass training simulation - The Tab - March 24th, 2024
- Zombie car factories on the rise in China as buyers opt for EVs - Financial Times - March 16th, 2024
- Hey, Remember When Rob Zombie Was Going To Direct THE CROW 3? - FANGORIA - March 16th, 2024
- New Walking Dead Twist Shows How The Zombie Outbreak Will Finally End - Screen Rant - March 16th, 2024
- Candid conversations from death row with The Zombie Hunter - Arizona's Family - March 16th, 2024
- Zombie! The Musical - REVIEW - City Hub Sydney - March 16th, 2024
- A Gorgeous Harp and Guitar String Duet of 'Zombie' by The Cranberries in Honor of Alexei Navalny - Laughing Squid - March 16th, 2024
- Y2K Review: A 1999 Youth Nostalgia Comedy That Turns Into an Attack-of-the-Computers Zombie Movie. But Only the First One Is Fun - Variety - March 16th, 2024
- AMC Announces Every Zombie in The Walking Dead Getting Its Own Spin-Off - Hard Drive - March 16th, 2024
- The Growing Threat of Zombie Code - CXOToday.com - March 16th, 2024
- The Greatest Zombie Movie Ever Gets Theatrical Return For Anniversary - Giant Freakin Robot - March 16th, 2024
- You won't expect which fighting game character pops up in this random mobile zombie game trailer for a bizarre ... - EventHubs - March 16th, 2024
- Coby White, Butler and the 'Zombie Heat,' Fontecchio Are All Here to Stay - Canis Hoopus - March 16th, 2024
- 'Land of the Dead' 19 Years Later: Romero's Return Was Smarter Than the Average Zombie Movie - Bloody Disgusting - March 16th, 2024
- Z Nation Season 6: SYFY Tease Return of Zombie Series 6 Years After Its Death - ComingSoon.net - March 16th, 2024
- Zombie! The Musical (Hayes Theatre Co) - Limelight - March 16th, 2024
- Get This Definitive Edition Zombie Game For Free Right Now On Steam - Screen Rant - February 19th, 2024
- The Best Ghost and Zombie Movie Romances - Vulture - February 19th, 2024
- The couple trying to keep killer 'zombie viruses' at bay - and protect us from another pandemic - The Telegraph - February 19th, 2024
- Meet the Serbian Businessman/DJ Who Runs the Zombie AI Southwest Journal - Racket - February 19th, 2024
- Dead Island 2 Spreading Its Zombie Virus to Steam in April - GameSpace.com - February 19th, 2024
- Lincoln hosts Alice Cooper and Rob Zombie - Omaha - KETV Omaha - February 19th, 2024
- 'The Walking Dead - The Ones Who Live' Review AMC's Zombie Epic Shambles On - Collider - February 19th, 2024
- Legislative recap: zombie bills, teacher pay, lithium tax, pipelines and more - Black Hills Pioneer - February 19th, 2024
- Japan's stock markets are on a tear. Will 'zombie firms threaten the bull run? - CNBC - February 11th, 2024
- Thebe Phetogos haunted response to zombie figuration in art - The Washington Post - February 11th, 2024
- Cosmic dust from 'zombie' galaxies could form planets and life - The Telegraph - February 11th, 2024
- I walked with a zombie: 16 monster love interests that set hearts aflutter - The A.V. Club - February 11th, 2024
- Free Steam zombie shooter you've never heard of is getting rave reviews, somehow - GAMINGbible - February 11th, 2024
- South Korea's 'zombie football' finally leaves them in a hole too deep to climb out of - ESPN - February 11th, 2024
Reviewed and Recommended by Erik Baquero