Prior to the introduction of the Preventive Restructuring Framework by the StaRUG out-of-court restructurings in Germany other than the restructuring of German law-governed bonds generally required unanimous approval by all affected creditors. Existing in-court procedures were only available in case of insolvency, and entailed substantial court involvement.
The economic shock and disruption caused by the outbreak of the SARS-CoV-2-Virus (COVID-19-pandemic) resulted in unprecedented circumstances for companies and prompted recent emergency rescue measures by the German legislator. In the following, we are highlighting two major legislative measures that will come into force in the next few days.
Legislative changes to mitigate the consequences of the COVID-19-pandemic with respect to specific contract, corporate, insolvency and criminal law matters (the “COVInsAG”)
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
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.
On August 2, 2010, Maru E. Johansen, in her capacity as the foreign representative (the “Foreign Representative”)1 in respect of Mexican insolvency proceedings regarding Compania Mexicana de Aviacion, S.A. de C.V. (“Mexicana”), filed a petition for recognition in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), commencing a case under Chapter 15 of the United States Bankruptcy Code.2 Mexicana and its affiliates operate Mexicana Airlines, Mexico’s largest airline.