In Uralkali v Rowley and another [2020] EWHC 3442 (Ch) – a UK High Court case relating to the administration of a Formula 1 racing team – an unsuccessful bidder for the company's business and assets sued the administrators, arguing that the bid process had been negligently misrepresented and conducted.
The court found that the administrators did not owe a duty of care to the disappointed bidder. It rejected the claimant's criticisms of the company’s sale process and determined that the administrators had conducted it "fairly and properly" and were not, in fact, negligent.
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the super scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
As we enter the final quarter of what has been a tumultuous year, the UK restructuring market has been open as usual for companies and creditors seeking to use the flexible restructuring implementation process of a Part 26 “scheme of arrangement” or the latest and greatest restructuring process now found in Part 26A of the Companies Act, a “restructuring plan” (or “Super Scheme” as we like to dub it).
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the Super Scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process dubbed the Super Scheme. The first such Restructuring Plan, used in the financial restructuring of Virgin Atlantic Airways (VAA), was sanctioned by the High Court on 2 September 2020 representing a new landmark in the UK restructuring landscape.
The new UK Restructuring Plan
The Corporate Insolvency and Governance Act, which received Royal Assent on 25 June 2020, contains a range of significant reforms, not least of which is the introduction of a new Restructuring Plan process. Together with the sweeping changes that the Act has in its sights, the Restructuring Plan and associated changes are aimed at improving the tools for companies to be effectively and efficiently rescued.
Key takeaways
On September 1, 2016, a rehabilitation procedure was commenced in the Seoul Central District Court in respect of Hanjin Shipping Co., Ltd (Hanjin). This action followed many months of discussions between Hanjin and its creditors (both local and international) designed to reach a consensual restructuring, as a result of which various creditors had voluntarily agreed to postpone exercising claims. Such agreement was eventually suspended on August 30, 2016 following notice to Hanjin that such creditors were unable to continue their support.
Background
On 4 February 2014, our client, Zlomrex International Finance S.A. (“ZIF”), completed the restructuring of its approximately €118 million senior secured high yield notes due 2014 (the “Existing High Yield Bonds”). ZIF, a company incorporated in France, is a financing vehicle for the Cognor group, one of the largest suppliers (by volume) of scrap metal, the second largest seller of semi‑finished steel products and the fifth largest seller (by volume) of finished steel products in Poland.
Fundamental restructuring of insolvent companies—in any sector— is a fight for survival.
Given the global nature of the industry, it is perhaps no surprise that shipping companies and their advisors have sought appropriate court protection to alleviate creditor pressure and a possible break-up of the business where a consensual restructuring is not possible.