COVID continues to impact the business world in ways few were ready for. The already evident spike in insolvency and bankruptcy litigation is expected to grow in the coming months and beyond.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
COVID continues to impact the business world in ways few were ready for. The already evident spike in insolvency and bankruptcy litigation is expected to grow in the coming months and beyond.
Burford Capital spoke with industry experts to get their thoughts on these developments. They include Margot MacInnis of Grant Thornton, Jason Yardly of Jenner & Block, Derek Lai of Deloitte China, and Thomas Janover of Kramer Levin.
When asked what types of cases would be most prevalent in the near future, Lai predicted that fraud cases may increase. He suggested that when businesses are scrambling to make up for losses, fraud may follow. Margot MacInnis brings up insurance claims, which are already contentious, as insurers look for ways to hold back payouts related to COVID closures.
Jason Yardley explained that the issues that caused the 2008 financial crisis were never fully resolved. This means that insolvency cases, including disputes over the value of assets, will be huge. Thomas Janover echoed that sentiment, saying that he expects more litigation involving breach of contract suits and endless valuation testimony.
When asked how to best address the needs of clients in financial distress, MacInnis states that insolvency lawyers must have detailed discussions with clients about their options. Only through informed decision making can businesses make good choices on how to proceed during a pandemic. Lai suggests reaching out to clients to develop relationships and assuage their fears while streamlining risk management. Being able to help clients in crisis with swift, decisive action can make all the difference.
As with most things, the keys to financial survival in the time of COVID include strong communication, solid information, and flexibility.
