Restructuring an international group of companies in Europe continues to be challenging. While companies can transact business freely across European borders, coordination between the stakeholders involved in a cross-border restructuring has proved to be difficult. The cross-border restructuring of a corporate group is often complicated by a multitude of individual liquidation proceedings spread throughout the various countries in which the group is active.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
RESTRUCTURING FOCUS ON 2019
JANUARY 2019
RESTRUCTURING: FOCUS ON 2019
CONTENTS
1
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
2 4 6 8 10 12 14 16 17
2 RESTRUCTURING: FOCUS ON 2019
VIEW FROM THE TOP
RESTRUCTURING: FOCUS ON 2019
3
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 24 February, the Government published draft regulations that, if implemented, will impose new restrictions on pre-pack administration sales to connected parties. For all `substantial disposals' (which will include `pre-pack' sales) to connected parties, taking place within eight weeks of the administrators' appointment, the administrators will either need creditor consent or a report from an independent `evaluator'.
Context
On 28 January, the English High Court handed down the first ever judgment sanctioning a restructuring plan under Part 26A of the Companies Act 2006 (“CA 2006”) (“Plan”) invoking the new cross class cram down procedure introduced into UK law in June 2020.