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The top five points for corporate borrowers to protect themselves against bank insolvency in Europe and elsewhere

Following a number of recent high-profile collapses of banks in Europe and the United States (notably, Credit Suisse, Silicon Valley Bank, Silvergate Bank and Signature Bank), not only their investors but also their clients may be considering their position under financing arrangements and applicable insolvency law.

Here are five steps that corporate borrowers can take to protect themselves against the fall-out of their financing banks’ insolvency:

European Union, Banking, Insolvency & Restructuring, Stibbe, Insolvency, Bank Recovery and Resolution Directive (2014/59/EU)
Court of Appeal Arnhem-Leeuwarden: Termination of a credit agreement by the bank was allowed, following reduction of the value of pledged shares caused by actions of the borrower

In a judgment dated 13 October 2015 in proceedings between a bank and its client the Arnhem-Leeuwarden Court of Appeal ruled that the bank was allowed to terminate the credit agreement with the client on the grounds that the client had caused a reduction in the value of shares pledged to the bank.

Arnhem-Leeuwarden Court of Appeal 13 October 2015 (ECLI:NL:GHARL:2015:8354)

Netherlands, Banking, Insolvency & Restructuring, Litigation, Stibbe, Debtor, Court of Appeal of England & Wales