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Unsecured "credit bid" for assets of a company in special administration

Summary

United Kingdom, Banking, Company & Commercial, Insolvency & Restructuring, Litigation, Mayer Brown, Sanctions, Financial Conduct Authority (UK), High Court of Justice (England & Wales)
Credit Bidding: A US import that will be a key part of a UK lender’s toolkit in the current distressed market

Credit bidding is a mechanism, enshrined in the US bankruptcy legislation, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security. In effect, it allows the secured creditor to offset the secured debt as payment for the assets and to take ownership of those assets without necessarily having to pay any cash for the purchase. Whilst there is no statutory equivalent in the UK, the process has evolved here into an accepted practice.

United Kingdom, USA, Insolvency & Restructuring, Litigation, Mayer Brown, Bankruptcy
The need for a legal ground to stand on: a shareholders class action is dismissed at the authorization stage for failure to meet article 1003 b) C.p.c. (Groupe d’action d’investisseurs dans Biosyntech c. Tsang, 2015 QCCS 3265)

In the spring of 2010, BioSyntech, a start-up biotechnology company, developing a cartilage-repair product, BST-Car Gel, filed a Notice of Intention to make a proposal under the Bankruptcy and Insolvency Act. In the subsequent bankruptcy proceedings, the intellectual property relating to the BST-Car Gel was sold.

Canada, Insolvency & Restructuring, Litigation, McCarthy Tétrault LLP