On April 23, 2019, the United States District Court for the Southern District of New York, in fraudulent transfer litigation arising out of the 2007 leveraged buyout of the Tribune Company,1 ruled on one of the significant issues left unresolved by the US Supreme Court in its Merit Management decision last year.
Intercreditor agreements--contracts that lay out the respective rights, obligations and priorities of different classes of creditors--play an increasingly important role in corporate finance in light of the continued prevalence of complex capital structures involving various levels of debt. When a company encounters financial difficulties, intercreditor agreements become all the more important, as competing classes of creditors seek to maximize their share of the company's limited assets.
On January 17, 2017, in a long-awaited decision in Marblegate Asset Management, LLC v. Education Management Finance Corp.,1 the US Court of Appeals for the Second Circuit held that Section 316 of the Trust Indenture Act ("TIA") does not prohibit an out of court restructuring of corporate bonds so long as an indenture's core payment terms are left intact.
Savers who become bankrupt but have not yet drawn their pensions will not have to hand them to creditors after a ruling of the Court of Appeal put an end to fears that pension pots were at risk.
The Court of Appeal upheld the High Court’s ruling on Horton v Henry, originally heard in 2014, settling legal difficulties arising from a conflicting judgment of Raithatha v Williamson (2012); and the introduction of the pension freedoms.
The senior board members (other than Sir Philip Green) are next to face the committees comprising Lord Grabiner, non-executive chairman of Traveta Investments Limited and Traveta Investments (No 2) Limited; Ian Grabiner, CEO of Arcadia; Paul Budge, FD of Arcadia and former BHS board member; Gillian Hague, group financial controller of Arcadia; and Chris Harris, group property director for Arcadia. This group of individuals (other than Lord Grabiner and Ian Grabiner) together with Sir Philip Green comprised the Traveta board’s sub-group responsible for negotiating the sale of BHS.
The adviser group 2 session on Monday 23 May comprised Owen Clay, corporate lawyer for Arcadia and Traveta (Linklaters); Steve Denison, auditor of Traveta and its subsidiaries, including BHS (PwC); and Anthony Gutman, ‘informal’ adviser to the Arcadia Group (Goldman Sachs).
The questioning focused on the solvency position of BHS at the time of the acquisition, the level of due diligence undertaken on the eventual acquirer (Retail Acquisitions Ltd) and the recognition of the pensions deficit in the deal negotiation.
Monday 23 May saw the turn of the advisers. This update concentrates on what we will call “adviser group 1” comprising Emma King, the trustees pension lawyer (Eversheds); David Clarke, covenants adviser to the trustees (KPMG); Tony Clare, restructuring pensions adviser to Taveta Investments Limited, the previous owner of BHS (Deloitte); Ian Greenstreet, pension lawyer to Taveta Investments Limited (Nabarro); and Richard Cousins, the independent actuary to the Taveta group (PWC).
Help is at hand for insolvency practitioners (IPs) who need clarification on the Regulator’s views on scheme trustee appointments and statutory notices. The Pensions Regulator recently released a statement intended to assist IPs to understand these two areas which are of particular relevance to them.
TRUSTEES
The statement deals with scheme trustee appointments in four areas:
On December 5, 2013, Judge Steven Rhodes of the US Bankruptcy Court for the Eastern District of Michigan held that the city of Detroit had satisfied the five expressly delineated eligibility requirements for filing under Chapter 9 of the US Bankruptcy Code1 and so could proceed with its bankruptcy case.