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This briefing first appeared in the June 2020 edition of South Square Digest.

Executive Summary

In February 2020 the British Virgin Islands Commercial Court (the "BVI Court") sanctioned a creditor scheme of arrangement, which was part of a much larger cross boarder restructuring. This scheme of arrangement, which as a creditor scheme was itself rare for the BVI, was preceded by the BVI's first ever "soft touch" provisional liquidation (in linked proceedings), which commenced in December 2018.

Market participants welcome a clarification extending equitable subordination exemptions granted Sareb to those subsequently purchasing debt from Sareb.

On November 30, 2013, the Spanish legislator approved a recent amendment to Spanish insolvency law, introduced in March 2013, to clarify that a claim transferred to Spanish “bad bank” Sareb, and subsequently sold by Sareb to a third party, will also be exempt from equitable subordination risk.

Background

The Spanish Congress has approved important amendments into the so-called Spanish scheme of arrangements, to facilitate Spanish company refinancings.