On April 23, 2019, the United States District Court for the Southern District of New York, in fraudulent transfer litigation arising out of the 2007 leveraged buyout of the Tribune Company,1 ruled on one of the significant issues left unresolved by the US Supreme Court in its Merit Management decision last year.
Intercreditor agreements--contracts that lay out the respective rights, obligations and priorities of different classes of creditors--play an increasingly important role in corporate finance in light of the continued prevalence of complex capital structures involving various levels of debt. When a company encounters financial difficulties, intercreditor agreements become all the more important, as competing classes of creditors seek to maximize their share of the company's limited assets.
Carpetright, the UK flooring company, has announced that it is considering a Company Voluntary Arrangement with the aim of “rationalising the company’s property portfolio in order to improve the long-term prospects of the business”. This is expected to enable the business to close unprofitable shops and reduce their rent bill. With 409 shops across the country, any proposed CVA is going to have a significant impact on landlords.
Media attention has waned from the initial deluge of front-page headlines regarding the Carillion collapse. It would therefore be easy to be ignorant of the ongoing disintegration of the web of Carillion companies beneath Carillion Plc, the ultimate parent company of the Carillion group, which (according to its latest accounts) holds interests in over 350 subsidiaries or joint ventures all over the world.
The Insolvency Rules (England and Wales) 2016 (“IR2016”) came into force on 6 April 2016 applying to most corporate and personal insolvency regimes in England and Wales. However, there is still unfinished business for the Government and further regulation is expected to be introduced later this year to ensure the changes apply uniformly in all areas.
The recent case of Thomas & another v Frogmore Real Estate Partners & others [2017] EWHC 25 (Ch) provides useful guidance for anyone analyzing the centre of main interests (“COMI”) of a company not registered in the UK or other EEA state for the purposes of assessing whether or not insolvency proceedings relating to the company can be instigated in the UK courts under the EC Regulation.
On January 17, 2017, in a long-awaited decision in Marblegate Asset Management, LLC v. Education Management Finance Corp.,1 the US Court of Appeals for the Second Circuit held that Section 316 of the Trust Indenture Act ("TIA") does not prohibit an out of court restructuring of corporate bonds so long as an indenture's core payment terms are left intact.
On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code1 and so could proceed with its bankruptcy case.