The EMEA Determinations Committee's recent bankruptcy determination involving Selecta CDS provides additional insight on the types of chapter 15 filings that are likely to trigger Credit Events.
In Short
The Situation: On August 11, 2020, a Credit Derivatives Determinations Committee for EMEA ("DC") unanimously determined that the Chapter 15 filing by British retailer Matalan triggered a Bankruptcy Credit Event under standard credit default swaps ("CDS").
The Result: The DC's decision diverged from its only prior decision (involving Thomas Cook) on whether a Chapter 15 petition constituted a Bankruptcy Credit Event.
The Department for Business, Energy and Industrial Strategy published the Corporate Insolvency and Governance Bill yesterday (20 May 2020). The Bill, when enacted, represents the most significant amendment to the UK’s insolvency laws since the Enterprise Act 2002 introduced the administration regime.
China Medical Technologies (in liquidation) (CMED), whose executives have been charged in the United States for defrauding investors out of over US$400 million, has issued a claim against 91 partners at a Big 4 firm (as well as some former partners) in relation to their work on the auditing of the company. |
Former world number one and three-time Wimbledon champion Boris Becker, who was declared bankrupt by an order dated 21 June 2017, is claiming diplomatic immunity against ongoing bankruptcy proceedings in the High Court. Mr Becker claims his role as sports attaché to the Central African Republic (CAR) makes him immune from further actions against his assets over debts owed to private bank Arbuthnot Latham and other creditors.
For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.
Recent Developments
On February 1, 2017, the Supreme Court of Singapore and the U.S. Bankruptcy Court for the District of Delaware announced that they had formally implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (the "Guidelines"). The U.S. Bankruptcy Court for the Southern District of New York adopted the Guidelines on February 17, 2017.
The Act is a groundbreaking development in Singapore's corporate rescue laws and includes major changes to the rules governing schemes of arrangement, judicial management, and cross-border insolvency. The Act also incorporates several features of chapter 11 of the U.S. Bankruptcy Code, including super-priority rescue financing, cram-down powers, and prepackaged restructuring plans. The legislation may portend Singapore's emergence as a center for international debt restructuring.
In Short:
The Action: Courts in Singapore and the states of New York and Delaware have formally implemented Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters.
The Motivation: The Guidelines were developed to improve the efficiency and effectiveness of cross-border insolvency proceedings and to encourage coordination and cooperation among relevant courts.
Looking Ahead: Expect the Guidelines to be implemented in other significant jurisdictions.