The United States Bankruptcy Court for the Southern District of New York was recently presented in In re Rede Energia, S.A.with the question of whether a confirmed Brazilian reorganization plan for Rede Energia, S.A. should be enforced in the United States.
RESTRUCTURING FOCUS ON 2019
JANUARY 2019
RESTRUCTURING: FOCUS ON 2019
CONTENTS
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VIEW FROM THE TOP NEW MONEY CONSIDERATIONS SOMETHING FOR ALL INVESTORS? THE INTERCREDITOR MINEFIELD LESSONS FROM CLAIRE'S STORES GOVERNANCE THE SPECTRUM OF OPTIONS CHAPTER 11 FOR THE UK? BREXIT AND UK INSOLVENCY REFORM EU INSOLVENCY REFORM: A CHANGING LANDSCAPE INDEPENDENT RECOGNITION WEIL CONTACTS
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2 RESTRUCTURING: FOCUS ON 2019
VIEW FROM THE TOP
RESTRUCTURING: FOCUS ON 2019
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Business Finance and Restructuring What will 2018 hold? Horizon scanning for 2018 Legal Outlook Legislative changes Reform of English corporate insolvency framework The Insolvency Service has yet to react to responses to its consultation in mid-2016 on significant reforms designed to improve the restructuring tools available to companies.1 We had expected the government to push this forward in 2017, but the reforms appear to have stalled and the issue was sadly missing from the Queen’s Speech.
In a highly-anticipated decision on a long-running bondholder dispute, the US Court of Appeals for the Second Circuit issued its judgment last week in Marblegate Asset Management LLC v Education Management Corp. It concluded that “Section 316(b) [of the US Trust Indenture Act 1939] prohibits only non-consensual amendments to an indenture’s core payment terms”, i.e. the amount of principal and interest owed and the maturity date.
Major legislative changes
Reform of English corporate insolvency framework
The Insolvency Service is reviewing responses to its consultation on significant reforms designed to improve the restructuring tools available to companies. These include:
On 22 November 2016, the European Commission announced a draft directive on insolvency, restructuring and second chance in the EU in the form of the EU Business Restructuring Directive (the “Proposed Directive“) which can be read here.
On Monday 17 November 2014, Weil held its inaugural European Distressed Investor Conference at The Dorchester in London. A summary of the key discussion points follows.
Panel A:
The French conciliation procedure, introduced in 2005, has become such a key procedure in France that it cannot be ignored. For any restructuring involving France (whether partially or wholly), the possibility of a conciliation procedure has to be seriously considered.
Concept of conciliation procedure
On June 30, 2016, Congress passed and President Obama signed into law a new piece of federal legislation that will govern the restructuring of U.S. territories: Public Law No: 114-187. Although not limited to the Commonwealth of Puerto Rico, enactment of the new law, entitled the Puerto Rico Oversight, Management, and Economic Stability Act or “PROMESA,” represents a bipartisan achievement in the context of a worsening fiscal crisis in Puerto Rico.
Bond restructurings Implementation mechanisms: schemes vs. exchange offers December 2015 ■ a principal haircut; ■ extended maturity; and / or ■ a change in coupon (rate and/or whether the coupon is cash-pay or PIK). Exchange offers are based entirely on voluntary participation. They can only succeed if a critical mass of bondholders agrees to participate. A “carrot and stick” approach is used to incentivise participation and penalise holdouts. For background on the use of schemes of arrangement as restructuring tools, see here.