Decisions taken today may preclude undesirable situations and future liabilities. A prudent administrator always has to be forward-thinking.

Business continuity is built on financial standing and depends on solvency. The COVID-19 crisis is compromising the liquidity of many companies and it is still impossible to forecast any early recovery of company liquidity.

In the event of a failure to fulfil a company’s due payment there are various interests that we need to protect:

• The company as a feasible business: the profitability and survival of the company which needs to survive despite the occasional insolvency in order to avoid bankruptcy proceedings. To this end, it is necessary to set in motion the company’s pre-insolvency restructuring mechanisms – “protective shields”- in order to avoid a bankruptcy procedure.

• Should the bankruptcy proceeding be likely to occur, we need to put into place adequate measures to preserve business continuity, such as an individual voluntary arrangements proposal, a continuity arrangement proposal, or even carrying out the alienation of production units.

• To prevent management from being held personally liable, either for acting or for failing to act, including those that may arise from the lack of implementation or enforcement of the relevant legal and corporate measures in the event of reaching a pre-bankruptcy or bankruptcy status.

It is advisable for a company to assess any and all insolvency risks on a case by case basis- gross negligence, negligence, minor breach of relevant duty of care- including any current or future risks which the company may incur, also in connection with any contingency plan or plan of action of any nature. To be able to rely on the support of internal appraisers and evaluators who may enlighten or provide contrasting or opposing approaches or methodologies is a clear competitive advantage.