The vast majority of corporate debt issuances are made pursuant to a trustee structure. This approach affords investors the advantage of uniformity of treatment and facilitates collective action, as opposed to the alternative 'fiscal agency' or direct issuance structure. But what happens when an individual investor in a global note structure seeks to take direct enforcement action against an issuer?
Executive Summary
Battered by the COVID-19 pandemic and the decline in passengers travelling to Hong Kong, Hong Kong Airlines (HKA) has become the latest carrier to undergo a debt restructuring. Its restructuring plan was sanctioned by the English court on 9 December 2022 and its scheme of arrangement was sanctioned by the Hong Kong court on 14 December 2022.
In summary:
Summary
The Hong Kong Court and the US Bankruptcy Court have made conflicting comments regarding the discharge of New York law-governed debt by a foreign scheme of arrangement, where that scheme is the subject of recognition under Chapter 15 of the US Bankruptcy Code.
Some 13 years ago, Lehman Brothers' sudden and unexpected insolvency sent ripples across the banking and financial services market, some of which are still felt today.
The Court of Appeal's decision in the consolidated cases of Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings plc (in administration) and others1 [2021] EWCA Civ 1523 was the latest in a long line of cases seeking to unwind the issues arising from Lehman Brothers' unexpected collapse.
The background
This recent interlocutory decision in The Deposit Guarantee Fund for Individuals (" the DGF") v Bank Frick & Co AG ("Bank Frick") & Anor deals another blow to the DGF in its recent attempts to pursue claims in England which allegedly arise following the 2014-15 banking crisis in Ukraine.
Background
At first blush, it may seem counterintuitive for financiers to compete to provide loans to debtor companies that have just filed for protection under an insolvency or restructuring procedure, but they have been proven to do so on a large scale in US Chapter 11 cases and for a variety of reasons, whether to protect an existing loan position or taking an opportunity to garner significant, safe returns as a new lender.
In the recent case Re CW Advanced Technologies Limited, the Hong Kong court took the opportunity, albeit only obiter dicta, to raise and briefly comment on certain unresolved questions surrounding three issues of interest to insolvency practitioners:
A recent application made by the insolvency practitioner of Agrokor, a major Croatian conglomerate, resulted in recognition in England of a stay of civil proceedings against the group. The purpose of the application was to halt any proceedings in relation to Agrokor's securities and debt obligations containing English law and jurisdiction provisions, pending the restructuring in the Croatian insolvency proceedings of the group's affairs.
Experienced insolvency practitioners in Hong Kong are all familiar with Hong Kong Court of Appeal's decision of 1 March 2006 in the liquidation of Legend International Resorts Limited1.
In Lehman Brothers International (Europe) (in Administration) v Exxonmobil Financial Services BV(1) the High Court considered a range of issues arising from the application of the close-out provisions of the standard-form Global Master Repurchase Agreement (GMRA) 2000.