In the current economic climate, there are a number of key issues facing borrowers in the event of lender insolvency or default.
Committed facilities/term loans
Provided they are fully drawn and the borrower is not in breach itself, the impact in the short term may not be too severe.
Introduction
On 25 July 2008, HM Treasury published a Consultation Paper entitled Modernising the insolvency protections for the operation of financial markets - proposals to reform Part 7 of the 1989 Companies Act (the Consultation Paper).
Proposals
In Sea Emerald SA v Prominvestbank - Joint Stockpoint Commercial Industrial & Investment Bank - Lawtel 19.8.08 the Commercial Court gave a reminder of the importance of ensuring that the person signing a guarantee upon which you may seek to rely has authority to do so.
We look at the recent case of Barlow Clowes International Ltd & Ors v Henwood [2008] EWCA Civ 577 which considers when a domicile of origin can be revived.
Background
The FSMT has handed down its decision in the case of Asgar Ali Ravjani (trading as Astrad Finance) v Financial Services Authority, which involved the failure to disclose a discharged bankruptcy to the FSA.
This memorandum provides an overview of the practical issues facing a sub-participant under a Loan Market Association ("LMA") English-law governed sub-participation agreement as the creditworthiness of grantor deteriorates.
On 15 September 2008, the FSA published a statement concerning Lehman Brothers Holding Inc.
In the statement the FSA states that Lehman Brothers Holding Inc, a US investment bank, announced that it intends to file a petition under chapter 11 of the US Bankruptcy Code.
Introduction
The filing on 15 September 2008 for Chapter 11 protection under US bankruptcy laws by the Lehman Brothers ultimate parent company, Lehman Brothers Holdings Inc., led to several UK-based entities of the Lehman Group entering administration.
So long as there is no evidence of willful default or lack of reasonable diligence, failure to submit a claim form in time in relation to a CVA may not be fatal.
When there is a dispute as to which administrator should be appointed, the wishes of the creditor, for whose benefit the administration was, takes precedence.