The European Commission ("Commission") has released a consultation paper to evaluate the merits of introducing measures to support secondary markets for distressed debt and the development of a new, contractual-based loan security obligation.

Consultation

Consider this situation: a dispute has arisen between two parties in relation to an agreement which is subject to an arbitration clause. Separately, a winding up application has been made against one of the parties to the arbitration in the jurisdiction in which it is incorporated. An arbitral award is obtained against the potentially insolvent company. That company has assets in Hong Kong, against which the creditor is now seeking to enforce their rights.

The recentThomas Cook refinancing and Cortefiel scheme of arrangement offer contrasting examples to investors of the risks and rewards of adopting a hold-out position in complex multijurisdictional restructurings.