In this article, we examine (1) the new regime for safeguarding of customer funds applying to UK payment and electronic money institutions, (2) the impact these reforms will have on those firms and (3) in particular, the indirect effect the reforms will have on banks holding safeguarded funds and insolvency practitioners who manage the insolvency of a failed payment or electronic money institution.
They say every man needs protection, they say that every man must fall.1
Liability management transactions which may favour a subset of creditors over another are increasingly common in the US leveraged finance markets. 2024 may be seen as the year in which these US imports began to make a real impact in Europe. Which strategies could creditors employ to protect themselves from unfavourable treatment where such transactions are attempted?
Summary
In the first appeal of a restructuring plan under Part 26A Companies Act 2006, the English Court of Appeal unanimously set aside the first instance decision sanctioning the plan proposed by AGPS BondCo PLC, part of the Adler real estate group1.
Senior secured creditors, being the anchor creditor in the capital stack, will always be focused on ensuring their priority claim is as robust as possible, with clearly delineated capacity for 'super priority' debt. However, today's documentary flexibilities, coupled with local legal restrictions, can mean senior secured creditors are not as 'senior secured' as they think. Here are some points to think about.
Super Senior Debt
Summary
Trustees and officeholders (such as administrators, receivers and liquidators) can ask the Court to approve steps that they propose to take in the administration of their estate (such as the sale of an asset or settlement of a claim).
In figures released on Friday 28 July 2023 from the Insolvency Service, the total number of registered company insolvencies in England and Wales during Q2 2023 was 6,342, the highest since Q2 2009 and up by 9% compared to Q1 2023. The construction industry was again the hardest hit (a trend going back over a decade). Whilst more construction companies went into administration during Q2 compared to Q1, significantly higher numbers went quietly into liquidation during the same period, at an average rate of around 11 per day.
Summary
The construction industry trade press frequently writes about administrations in the industry. Whilst the Insolvency Service's figures show that around one construction company went into administration every other day in Q1 2023, significantly higher numbers went quietly into liquidation during the same period.
Each week we are seeing stories in the news about construction companies becoming "insolvent", going into "liquidation" or having "administrators" appointed. But what do these terms mean? Insolvency is a complex area of law with its own terminology, so we've broken down what all the terms mean below.
What is insolvency and what happens to a company when it is insolvent?