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The Twilight, or Rebirth, of Liability Management? Serta and Mitel Decisions Reach Opposite Conclusions on the Permissibility of Uptier Exchange Transactions

Introduction & Key Takeaways

The year 2024 ended with some major legal fireworks, as two important courts issued contrasting New Year’s Eve decisions on the validity of “uptier” liability management transactions that have played a large role in corporate debt restructurings for the past several years.

USA, Banking, Company & Commercial, Insolvency & Restructuring, Litigation, Cadwalader Wickersham & Taft LLP
Landlord wins as CVA term not a penalty

Following the liquidation of BHS Ltd, the High Court was asked to consider whether a landlord could claim full rent as an administration expense following termination of the CVA.

Background

Wright and another (Liquidators of SHB Realisations Ltd) v The Prudential Assurance Company Ltd concerned three principal insolvency processes applicable to companies under the Insolvency Act 1986:

United Kingdom, Insolvency & Restructuring, Litigation, Real Estate, Shoosmiths LLP, Liquidation