The European Commission has opened an in-depth investigation into plans to restructure the Royal Mail.

Facts
Extension for intermingling of assets
Issues

On April 13 2010 the Court of Cassation rendered a noteworthy decision sending two interlocutory questions to the European Court of Justice (ECJ). In anticipation of the ECJ's decision, this update examines the issues raised before the Court of Cassation.

Introduction

The eurozone crisis and the fallout taking place in Greece are keeping Europe on edge. An increasing number of analysts anticipate a new recession. Perhaps you, too, are wondering how the situation will affect your business, especially your international contracts. Below is a short outline of potential issues that we think are relevant. We have approached these issues from the perspective of doing business, or planning to do business, with foreign parties that run a higher than average risk of being "hit" by the current economic situation.

Potential issues

 Summary

In its communication on an EU framework for crisis management in the financial sector dated 20 October 2010, the European Commission set out several major legislative proposals aimed at preventing a repeat of the recent bank failures that necessitated significant state aid.

CEIOPS holds annual conference: CEIOPS has held its annual conference. The event included a panel session on Solvency II and discussion by Sharon Bowles of the new European Supervisory Authorities.

The Commission is consulting on the application of the current Community guidelines on State aid for rescuing and restructuring firms in difficulty. It has provided Member States and other interested parties with a questionnaire, on which it asks for responses by 2 February 2011.

The Commission is consulting on the details of a framework for dealing with failing banks. Following October's Communication on a crisis management framework, the Commission wants to make a legislative proposal on technical measures for dealing with relevant institutions in summer 2011. The consultation looks at how to give authorities across the EU powers and tools to restructure or resolve all types of institutions in crisis. It covers:

The signs for the leveraged finance market in 2011 are mixed. Questions remain as to whether this year will see a fresh spate of restructurings and/or continued growth in primary issuance. Whilst data compiled by Fitch Ratings has shown that European PE backed company default rates slowed in 2010 (and premier league spending during the January transfer window topped £225 million compared with £30 million last year), the primary leveraged finance market has started slowly this year.

On 6 January 2011, the European Commission (the “Commission”) published a consultation paper on the technical details of a possible EU framework for bank recovery and resolution (the “Consultation Paper”).1 The paper follows the communication from the Commission dated 20 October 2010 on an EU framework for crisis management in the financial sector (the “Communication”).2

Restructuring companies in respect of which there exists a significant credit default swaps (CDS) market adds an additional level of complexity which the debtor and all stakeholders should consider and assess early on in the process, as it could determine the success or failure of a restructuring plan.