At the end of October the Pension Protection Fund announced that it had come to an agreement with Monarch Airlines and the Pensions Regulator to accept the Monarch Airlines Limited Retirement Benefit Scheme into a PPF assessment period. The agreement, reached after discussions between the parties and the Trustees of the Scheme will enable the airline to restructure its business and accept £125m in new capital and liquidity facilities from Greybull Capital LLP in return for a 90 per cent shareholding.

On 30 October 2014, the English High Court sanctioned the second scheme of arrangement for the APCOA group (the “Scheme”). APCOA has been one of the hottest names in the restructuring market in 2014. First, it broke new ground in relation to an “amend and extend” scheme in early 2014 when it established sufficient connection to England off the back of a change in governing law. Second, the Scheme was aggressively opposed and its sanction by the High Court was appealed to the Court of Appeal (although ultimately the appeal was withdrawn).

UK LEGAL HIGHLIGHTS 2014 AND BEYOND Welcome to our 2014 edition of UK Legal Highlights. This publication is a reminder of some of the most important and significant developments DLA Piper reported in 2014, along with some forthcoming developments to look out for in 2015 and beyond.

An investigation is to be carried out into the causes of the bankruptcy of OW Bunker (“OWB”), the largest ship fuel supplier in the world.  Investigators from two Danish law firms and Ernst & Young will try to establish the reasons for the failure of OWB less than a year after it was listed at a value of $1 billion. OWB has blamed its failure on hedging losses of $150 million, attributable to the falling price of oil and on a credit line estimated at between $120 and $130 million given by OWB’s subsidiary in Singapore, Dynamic Oil Trading (“DOT

In the Q3 2014 edition of Global Insight, we discussed the merits of bankruptcy sales for distressed hospitals in the United States. In many ways, the challenges facing healthcare companies in America have been mirrored in the UK care home sector in recent years. Unlike the US, the majority of health service provision in the UK is via the publicly funded National Health Service. An exception exists however in the provision of residential care to the elderly which has seen large scale private sector involvement.

CONSIDERABLE RISKS FOR PRIVATE INVESTORS

Mr Justice Hildyard has handed down his first instance decision on the second set of schemes of arrangement proposed by the Apcoa group.

Following on from our article on “Understanding and managing the risks of an insolvent acquisition” in the Q2 2014 edition of Global Insight, in this third article in our series of risks and opportunities in the fashion retail sector we assess one of the most prominent areas of risk for suppliers - the insolvency of a trade customer/retailer. 

Introduction to CVAs

A company voluntary arrangement (“CVA”) is a tool available to a company in financial difficulty to restructure its debts. In contrast to other insolvency procedures, the directors remain in control of the business which continues to operate broadly as normal, subject to the supervision of an insolvency practitioner (“the Supervisor”).

Singularis Holdings Limited v PricewaterhouseCoopers [2014] UKPC 36

PricewaterhouseCoopers v Saad Investments Company Limited [2014] UKPC 35

The Privy Council gives credence to the concept of “modified universalism” (being the court’s common law power to assist foreign winding up proceedings) and notes some of the circumstances which would permit a “stranger” to a winding up order the opportunity to challenge that order.

The facts:

Key Points

• Paragraph 13 of Schedule 4 to the Insolvency Act 1986 ("Paragraph 13") permits a liquidator to do all acts "necessary" for the winding up and distribution of property.
• The decision as to what action is "necessary" is one for the liquidators (albeit subject to sanction).
• Nothing in FSMA 2000 prevented the investors from assigning their claims against the former operators..

The facts